What Happened?
Shares of 3D printer provider Markforged (NYSE: MKFG) jumped 30.3% in the morning session after a court ruled in Desktop Metal's favor in its litigation against Nano Dimension regarding the pending merger between both companies.
Desktop Metal filed a lawsuit earlier, alleging that Nano violated the terms of its merger by subsequently entering into a separate merger agreement with Markforged. The complaint asserted that finalizing the Nano-Markforged merger before completing the pending merger between Desktop Metal and Nano could undermine or prevent the successful completion of that original deal.
Desktop Metal later dismissed Markforged from its lawsuit against Nano Dimension. So this news suggested that Markforged could anticipate a similar favorable outcome, which would ensure the completion of its planned merger with Nano Dimension.
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What The Market Is Telling Us
Markforged’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. But moves this big are rare even for Markforged and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 74% on the news that it agreed to be acquired by Nano Dimension in an all-cash transaction for $5.00 per share. The acquisition price represents a 71.8% premium to Markforged's price on September 24th, 2024 (the day before the acquisition agreement was announced).
The acquisition was expected to improve Nano Dimension's recipe for providing additive manufacturing and 3D printing technologies following its recent decision to acquire Desktop Metal. Besides the anticipated financial and operational synergies, via the deduplication of processes and functions, the deal is expected to provide the combined company with the technology to rapidly gain market share and deliver more scalable solutions in a growing market.
Markforged is up 26.9% since the beginning of the year, but at $4.24 per share, it is still trading 50.4% below its 52-week high of $8.54 from March 2024. Investors who bought $1,000 worth of Markforged’s shares at the IPO in October 2020 would now be looking at an investment worth $40.89.
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