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Nano Dimension: The Risk Of Further Dilution Remains High

Apr. 01, 2021 4:34 PM ETNano Dimension Ltd. (NNDM)39 Comments
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  • We believe that the upside in Nano Dimension is limited at this stage.
  • It’s safe to assume that by trading at a price-to-sales ratio of over 70x, the company’s future growth is more than priced in at this stage.
  • The possible stock offerings in the future are making Nano Dimension's stock less attractive in comparison to other stocks on the market.
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This article was amended on 4/2/2021 to reflect adjustments to the phrasing around dilution.

close up photo of futuristic 3d printer. micro and nano electronics b
Photo by Михаил Руденко/iStock via Getty Images

We believe that the upside in Nano Dimension (NASDAQ:NNDM) is limited at this stage. Our major concern with the

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Bears of Wall Street is a community of asset managers and traders who take a pragmatic approach to valuing companies. Bears of Wall Street provide unique research with a bearish sentiment on overvalued or weak companies with declining businesses and poor growth perspectives - companies whose likely depreciation can be capitalized on. They lead the investing group Best Short Ideas where they provide: trading alerts, weekly short ideas, live portfolio tracking, cash flow models, and chat for dialogue with the service leaders and community. Learn more.

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Comments (39)

I did not see Nano buying Deepcube but I enjoy the reaction the market is having in the rising stock price.
Shoeboxer profile picture
While I do appreciate bearish articles for their attempt to challenge biases, it’s kind of hard to take seriously someone who in 2018 was bearish on Square, a year ago was bearish on Zoom and recently wrote a bearish article about Palantir.

I bought the stock around $3, sold it around $12 since a capital raise seemed to occur on most major rallies. It's an interesting product, but a terrible stock.
@User 49822328 oh good
When you buying again

I personally wouldn't look at the stock again unless the company made it clear it's not going to keep doing significant dilution. Maybe when they are able to better operate under their own revenue.
This article was written by one number cruncher outside the industry. The DragonFly does not aim to replace the large industry of PCB manufactures. The DragonFly is not a disruptive technology. It has been producing printers of over 4 years and improving them with each iteration. The idea that it will prevent the theft of intellectual property is lame. The DragonFly makes a printed circuit board. It does not make the IC’s that go on the board. It does not program micro controllers. If you are sending your boards to China you are likely to want 100-10,000. The DragonFly adds a solution at the edge of the function of a printed circuit board.
One solution is that it can print multi-layers and print capacitors and resistors in the interior layers. This frees up area on the top and bottom for component placement. Also, one does not need a pick and place machine placing components and then running the pcb through a reflow oven. Second solution is the Dragonfly is ideal for printing antennas on the PCB. Antennas need to be tuned once designed to broadcast efficiently – enter the DragonFly. This finds application in satellite communication to mention only one example. Third solution is flex circuits. Fourth solution is capacitive touch screens like the one you have on your phone. The fourth solution is planar transformer windings embedded into the circuit board. This is a big niche for power supply manufactures if the new line of printer can reduce the nozzle over spray.
Other revenue mentions are the Nano conductive and dielectric inks that must be used with the DragonFly. This is “sell the razor” and make money on the blades. This is easy to understand, EPSON and HP do it.
You send them your Gerber’s and they will print a board for you and send it back to you. This is a good business. However, “which include designing, prototyping, and production of chips for third parties.” Please, Nano is not in the business of making IC’s nor does it design your PCB for you.
The dilution of stock is a drag. OK it is done. In a way the Pandemic pause could be a good thing if a better printer is developed. What is Nano doing with the funds?
Have you invested in a Hypot tester for the boards you send out to customer’s. All you had was a 9volt multi-meter. Can you test for inductance of your coils. What are enabling engineering improvements that Nano has made by moving to the new Florida facility. Marketing talk about being closer to the market is not a listening.
Can you solder to the PCB with slightly higher temperatures? Have the INKs improved?
Let’s talk of performance improvements instead of SPAC’s. What will the new printer offer?
Long and holding, though one more equity offering and I am out. Late fall should see some traction.
CEO said no more dilution; shareholders just gotta trust him. ;-)
There are many comments that are critical of this article without being specific. I would not have made the same points as the author but I would like to express my concerns about some of the ideas floated in these comments. Commenters have complained that: 1) the potential for future revenue is not recognized by the author and 2) the author has not accounted for the value of cash held by the company. I think that investors should seriously consider Alexaway's comment here. Dragonfly is not a disruptive technology that will displace current circuit board manufacturing for high volume board manufacturing. Dragonfly is cool but the total addressable market is just not there. It is a niche player for prototyping and very low volume manufacturing. Regarding the cash, the expectation is that the company will develop new applications that are much more profitable or acquire other companies and turn them into high profit products. In other words, invest and hope a miracle happens. The investment thesis seems to be that 3D printing is a disruptive technology that will displace current processes and therefore success is guaranteed. So far, as a mechanical engineer, I do not see where 3D printing results in a superior end product or produces at such reduced costs to make it highly attractive. There are certain niches where it fits nicely but that doesn't really describe a disruptive technology.
02 Apr. 2021
@hanging chad , sometimes arguments are so horrible and so poorly founded that it isn't as simple as pointing out a mistaken argument or two. Sometimes, not only the argument but the whole worldview that undergirds the argument is terribly flawed. When you speak with a flat-earther, you need to go beyond their arguments to address their whole worldview from which the arguments flow forth. This article was written by the stock market equivalent of a flat earther and just as most people roll their eyes at flat earthers and walk away without getting into a debate, that's what most people are doing here. The person who believes the earth is flat pretty much knows nothing about the world and the person who thinks this article made a argue argument against NNDM has done no research into the company. Such people are better off being ignored and chuckled at, not justified by speaking to them as though they were adults who did due diligence in their research.
Geez... the comments section is vitriolic. Good article, I agree that it’s market cap is over valued at this point. Will keep this stock on my watch list
@bshab you obviously have done no work to come to that determination. Good luck on anything you research. You will need it. Sheesh
One of the worst write ups I've seen in SA also
Goldseverum profile picture
This might be the most uninformed article I've ever read on Seeking Alpha. Usually shorts are well researched, this guy got it all wrong. Sad writing!!
AlexAway profile picture
“The biggest advantage of DragonFly is that it's able to replace traditional PCB manufacturers”

You most probably don’t understand what traditional fabrication of PCBs is. Millions of PCBs are printed for as low as 10’s cents each, equivalent cost. Output of million of PCBs may be as fast as 2-3 days. 3d printer has nothing to do with mass production. It’s absolutely not designed for this aim and does not have capabilities to print at low cost. Either, it does not have scaling capabilities. Search for PCB manufacturing to see how it looks like.
It is a 600 million dollar company with 1.5 Billion in cash to accelerate growth. Honestly I am surprised by the PE of 70, that is much lower than I expected after all the previous dilution. And with the 1.5 B in hand this number will decrease rapidly.
Sure, there is still risk, but show me a stock with zero risk.
tonyw10 profile picture
Your analysis is badly flawed. I almost stopped reading after the first couple of paragraphs. When comparing price to sales you should have deducted the cash in hand, over $6, from the price. Please learn the basics.
@tonyw10 I agree, the fact that they have diluted a lot it means they have plenty of cash and no need to further shares offerings. Having said that I am not bullish on the stock at these levels.
@tonyw10 I did stop reading. So sick of escalating short positions followed by bullshit SA articles written by those shorts. The market has become dirty with this contingent
hahaha......he might have open big short here idiot.
Thanks for your great article lol
I will buy more tomorrow
Laziest attempt at spreading FUD I've ever seen.....just embarrassing.
Orchestrated attempt. Think I'll buy more.
Chance888 profile picture
You just can’t make this kind of stuff up - oh, wait...
Nomadic Investing profile picture
Honestly why is the bar for bears so low?
This was a poorly researched article.
What's the price to sales ratio of a $1.5B pile of cash?
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