Days after investors pummeled Stratasys Ltd. for posting surprisingly dismal earnings results, the 3-D printing firm welcomed a slight reprieve in its stock decline. However, the downward slide started again Friday as the first of several threatened lawsuits was filed.
The law firm Robbins, Geller Rudman & Dowd sued Stratasys, alleging it violated Security and Exchange rules by inflating earnings forecasts for 2014. Other firms launched investigations this week, seeking plaintiffs who also might be interested in suing Stratasys.
The brouhaha started Tuesday when Stratasys surprised investors with news that it would take a $100 million charge for the fourth quarter and suffer a loss for the entire fiscal 2014 year. Officials said they now expect to lose $116 million to $129 million, or $2.32 to $2.58 a share.
The Eden Prairie manufacturer took the goodwill impairment charge related to its MakerBot consumer printer business. Stratasys bought MakerBot in 2013 for $400 million. The charge may exceed MakerBot's estimated annual revenue.
Four Wall Street analysts this week downgraded Stratasys' stock from buy to hold. As of Friday, only Gabelli & Co. bucked the trend, upgrading its rating to "buy."
The stock imploded Tuesday, dropping from $80.06 to $51.75, before closing at $57.36. That's a level not seen since 2012. The stock recovered early Friday to $63, but then fell again after the lawsuit was filed. It closed Friday at $61.37 a share.
Stratasys officials could not be reached for comment on the latest developments.
However, in a statement released earlier this week, Stratasys founder and Chairman Scott Crump, defied the hoopla. "Our growth in fiscal 2014 was impressive, we experienced estimated revenue growth of 54 percent compared to fiscal 2013, including organic revenue growth of 31 percent."
"Stratasys' prospects for 2015 and beyond are strong," he said. "We continue to see additive manufacturing being used to transform manufacturing processes across a wide range of sectors, augmenting our leading position in prototyping applications. We are also excited about our opportunity to build upon MakerBot's leading position in desktop 3-D printing."
Stratasys has been a fast-growing company and a long time Wall Street favorite given its booming technology, which uses computers, CADD software and melted plastic to inexpensively manufacture three-dimensional parts and products.
Stratasys makes commercial and consumer 3-D printers and separately manufactures products for customers on a contract basis. Customers include General Motors Co., Ford Motor Co., and Delta Air Lines.
Stratasys has dual headquarters in Rehovot, Israel, and in Eden Prairie.