As of today, December 10th, TRINE ACQUISITION CORP is to be negotiated on the NYSE under the Desktop Metal name, changing ticker from TRNE to DM and ISIN US89628U1088 to US25058X1054. That’s the note I got in my stock portfolio today. No huge surprise there. It was in the works and there probably is no better time.
Desktop Metal is betting (like all other serious contenders in the AM space – Stratasys just spent $100 million on this) that, within the next 5 years, AM will become a real, effective and cost-efficient production method. If this happens then the company will be able to generate $1 billion in yearly revenues (as it expects), from below $30 million today, and – if that happens (stressing the “if”) – then it will definitely be worth $5 billion, as its early private investors expect.
These are some of the key opportunity and threat elements relative to this bet:
Supporting factors:
- AM is definitely going to be a widespread mass/serial production method eventually. Eventually could mean in 5 years or in 15. It depends on when the technology will be ready.
- When the transition to digital production happens it will happen “overnight”. AM has been around for 30+ years as a prototyping method. Only for the past 5 years, have most AM companies been focusing on achieving production capabilities.
- Ric Fulop is good at making these kinds of bets (Markforged, Proto Labs, Onshape).
- Desktop Metal is spearheading the metal AM production business. There are other companies with metal binder jetting technology and more experience than Desktop Metal. However, Desktop Metal has been set on achieving production from the very start.
Risk factors:
- No pure player AM company in history has ever generated 1 billion in revenues. Some have come close. Some eventually will.
- Desktop Metal has competitors that are much larger than they are, including HP and GE.
- In terms of the real economy, the success of this operation depends on the efficiency and rate of adoption of the recently released Shop system (we still need to fully understand if the technology really works on a wide range of applications and more importantly if companies that do not already use AM can really learn rapidly to implement it).
- This is Fulop’s biggest and riskiest bet. It’s kind of like betting on Tesla stocks before Elon Musk even completed Tesla’s first production factory. Or betting on Apple before Steve Jobs even left (and came back from Pixar). It could go either way.
Desktop Metal announced it was going public last August by entering a definitive business combination agreement with Trine Acquisition Corp. and HPS Investment Partners. “We are at a major inflection point in the adoption of additive manufacturing, and Desktop Metal is leading the way in this transformation,” said at the time Ric Fulop, Co-founder, Chairman and CEO of Desktop Metal. “Our solutions are designed for both massive throughput and ease of use, enabling organizations of all sizes to make parts faster, more cost-effectively, and with higher levels of complexity and sustainability than ever before. We are energized to make our debut as a publicly-traded company and begin our partnership with Trine, which will provide the resources to accelerate our go-to-market efforts and enhance our relentless efforts in R&D.”
Disclaimer: The content of this article is provided for informational purposes only and is not intended for trading or investing purposes. The author of this article owns TRNE/DM stocks.
