Thursday, November 21, 2013

Want a good stock to short? Voxeljet (VJET) for ya, courtesy of Citron Research

I'm always fascinated by extremely volatile stocks, wanting to know what the fuss is all about. Take Voxeljet (VJET) for example. Their stock plunged over 30% yesterday to a little over $39 (!). This was largely due to a report from Citron Research that valued the stock a little over $12, and questioned how this company is even public in the first place. They have a point, they sold merely three printers in Q3 (which actually turned out to be less than that after you read the report. The small 3D printing company Voxeljet became public just a month ago, and it seems like investors bought into the hype that 3D printing is the future and started buying any IPO in that sector massively (it reached $70!) I've never been really a big fan of 3D printing companies and I don't think I ever will until it becomes more widely available. But $60 - $70 for a company that hardly sells? To me, it's as clear as a bell to short this stock.

Citron's report below:

As of this time of writing, VJET is down more than 7% in pre-market trading (around $36), after reading the report I seriously wonder if a short is the way to go here?

Look at those volume bars of the past couple of days. Oversold? Maybe, but it's price doesn't make any sense to me after Citron's report. Extremely volatile stocks like these are usually pretty risky, but it also means that a lot of money can be made if you're on the right side of the fence. When it comes to 3D printing companies, I'll stick with the bigger names such as 3D Systems (DDD) and Stratasys (SSYS), they have market capital in the billions, unlike Voxeljet that somehow managed to cough up 600 million in market cap, for what exactly - who knows. It makes me wonder how the market valued it so high in the first place, it's almost like some investors buy stocks from companies with doing any proper research. Anyway, I'm short VJET, that's for sure, I think it'll get a lot worse for them.

By: +John van der Munnik

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