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  • A Better Look At Voxeljet's IPO And Management

    So as i begin my research concerning Voxeljet i see there is a high degree of volatility with this stock, primarily because it has been the focus of a bull vs bear debate over the future of this sector, and the constant hassle from Short Sellers testing market fears of a "3d bubble".

    In my opinion the sector is probably years or decades of being mainstream used, but as i will state in this report this is not the issue we will debate.

    The issue in hand is if the Voxeljet team focuses its business in another matter: selling the company before it even starts making any progress.

    It is my belief that the Voxeljet team since the beginning of being a public company has considered this to be the only profitable alternative, and so has the market.

    Lets start by looking at the Sec Fillings you can find on the Edgar search on the Securities Exchange Commission web page under "Voxeljet"

    They have issued 6.500.000 ADS consisting of 1/5 of every 1.300.000 Ordinary Stocks.

    It is interesting to note that at the beginning they wanted the ADS to have an 1:1 issuance. Why the change?

    So its basically impossible to ever acquire the company on the stock market; you would just push the price higher, and only receive a fifth a stock.

    Furthermore, as a percentage of the stock composition, more than half belong to the supervisory board, and if you decide to vote on any of the decisions you still wouldn't be accounted for as it is stated in its fillings.

    You might wonder why would any one have any interest being in the supervisory board if they consist of Phds professors with debates in German. Well because one of the three members happens to have a considerable amount of shares and is the owner of a private investment holding company and specializes in "mid-market buy-outs".

    This member, Peter Nietzer, happens to be the chairman of the board.

    As taken from its web page and its Sec fillings:

    PETER NIETZER, CHAIRMAN

    Peter Nietzer was born in 1960 in Heilbronn, Germany, has been the chairman of our supervisory board since 2013. Mr. Nietzer has served as owner and managing director of KITES Industriebeteiligungen GmbH, a private investment holding company, and of M59 Advisory Services, since January 2013 and as Partner and Chief Financial Officer of GermanCapital GmbH, a private equity company he co-founded and that had specialized in mid-market buy-outs, since July 2005.

    Since April 2000, Mr. Nietzer has been an executive board Member and Managing Partner of Felicitas GmbH (which was previously known as GI Ventures AG), a fund management company he helped to found. Mr. Nietzer served as a Managing Director in the private equity unit of PartnersGroup AG from January to October 2011. Mr. Nietzer holds a M.B.A. from Friedrich-Alexander University Erlangen-Nürnberg, Germany.

    I am assuming they just simply copy/pasted this description from his CV they had kept when they hired him in 2013, without even editing it.

    Then you have its latest actions with its IPO cash: buying its headquarters.

    Why if ever would you even consider, as The Motley Fool so kindly put it, "burn 20% of its IPO cash" in buying instead of continue renting your work space. The answer is simple: Balance Sheet.

    As a company that you wish to sell in the future, you must have a proper balance sheet. And nothing is sweater than having tangible assets.

    Lets assume for one second this wasn't their objective, that they just bought the property because they felt like it and we'll never truly grasp the reason behind it. Well, property appreciates; it can be served as collateral for a loan; it diminishes m<onthly outflows of cash in the future. Or they probably didn't feel comfortable having that amount of cash and they gathered around and said: well if we are going to be a 40 year old company we might just buy this place.

    But yet again, i don't think the latter was their idea.

    From the markets perspective maybe they also think the same. It is quite compelling to see the stock rebound from mid 30's to mid 40's in the period Nov 22-Nov 26, and then tended to go downwards the day after HP in its third quarter investors conference call didn't mention anything concerning 3d printing or a possible small company acquisition in view.

    Time will tell. What do you think?

    Disclosure: I am long VJET.

    Dec 11 6:18 PM | Link | Comment!
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