BOSTON - Desktop Metal, Inc. (NYSE:DM), a leader in the 3D printing industry, announced the implementation of a 1-for-10 reverse stock split of its Class A common stock, which will take effect after the market closes on June 10, 2024. The move aims to elevate the per-share market price to comply with the New York Stock Exchange's minimum bid price requirement. Trading on a split-adjusted basis is expected to begin on June 11, 2024, under the same ticker symbol.
Shareholders approved the reverse stock split during the annual meeting on June 7, 2024, and the company's Board of Directors subsequently sanctioned the split at a 1-for-10 ratio. This consolidation will convert every 10 existing shares of Class A common stock into one new share. Adjustments will also be made to outstanding equity awards and shares under the company's equity incentive plans to reflect the change.
The reverse stock split will not alter the number of authorized shares or the par value of the stock. No fractional shares will be issued; instead, shareholders who would have received fractional shares will be compensated with a cash payment based on the June 10 closing sales price on the NYSE, adjusted for the split.
The transition for shareholders will be seamless, especially for those holding shares electronically or through a bank, broker, or other nominee, as no action is required on their part. Continental Stock Transfer & Trust Company will act as the exchange agent for the reverse stock split.
Desktop Metal specializes in Additive Manufacturing 2.0, focusing on the digital production of industrial, medical, and consumer products through advanced 3D printing technologies. The company is recognized for its pioneering methods in binder jetting and digital light processing.
This move to execute a reverse stock split is based on the information provided in the company's definitive proxy statement filed with the SEC on April 23, 2024, and further details can be accessed on the SEC's website or Desktop Metal's official site.
The company has cautioned that forward-looking statements related to the reverse stock split and its effects on share price and NYSE listing compliance are not guarantees of future performance and may be subject to change. Factors influencing these outcomes are detailed in the company's public filings available at www.sec.gov.
In other recent news, Desktop Metal, a prominent player in additive manufacturing, reported a slight dip in its revenue for the first quarter of 2024, clocking in at $40.6 million. However, the company's recurring revenue reached an unprecedented 43% of the total revenue, indicating robust product utilization. Desktop Metal has successfully managed to reduce its operating expenses for eight quarters in a row and has improved its adjusted gross margin for nine consecutive quarters.
The company has plans to bolster its sales force, aiming to add 30 new sales representatives to enhance its market presence. Desktop Metal is also exploring strategic alternatives for its photopolymer technologies as part of its future growth strategy. The company anticipates generating revenue between $175 million and $215 million for 2024 and expects to achieve positive adjusted EBITDA in the second half of the year.
InvestingPro Insights
As Desktop Metal, Inc. (NYSE:DM) navigates the challenges of the 3D printing market, the company's recent decision to implement a 1-for-10 reverse stock split reflects its strategic efforts to stabilize its stock price. While the reverse stock split is aimed at meeting the NYSE's minimum bid price requirement, it's important to consider the broader financial context in which the company operates.
Analyzing the latest data from InvestingPro, Desktop Metal's market capitalization stands at a modest $177.09 million, indicating a relatively small scale within the industry. The company has been grappling with profitability, as evidenced by a negative price-to-earnings (P/E) ratio of -0.57. This is further confirmed by an InvestingPro Tip, which suggests analysts do not anticipate the company will be profitable this year. Additionally, the company has experienced a significant decline in stock price over the past year, with a -73.73% return, which aligns with another InvestingPro Tip highlighting the stock's poor performance over the last month.
Despite these challenges, Desktop Metal shows some financial resilience. For instance, the company's liquid assets exceed its short-term obligations, providing it with a cushion to navigate immediate financial hurdles. This could be a reassuring sign for investors concerned about the company's ability to sustain operations in the short term.
For investors seeking more in-depth analysis and additional insights, there are over 10 InvestingPro Tips available, which could help in making more informed decisions regarding Desktop Metal's future. Interested readers can find these tips on InvestingPro's dedicated page for Desktop Metal at https://www.investing.com/pro/DM. Moreover, users can take advantage of a special offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As Desktop Metal continues to innovate in the field of Additive Manufacturing 2.0, investors and stakeholders will be closely monitoring the impact of the reverse stock split and the company's strategic initiatives on its financial health and market position.
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