Do you remember a company called 3D Pioneer Systems we covered in March? The company has a nice looking rendering for a 3D printer and accompanying wi-fi remote, with built-in webcam, and hopes to market mobile games with 3D printing tie-ins. They’ve also got a name that sounds like one of the biggest companies in the industry, if you take out the word “Pioneer”, and are traded on OTC Bulletin Board. To the people at financial tech blog nanalyze, investors hyped on the 3D printing industry should remain sceptical about this company.
Traded on the OTCBB means that 3D Pioneer Systems does not have to meet the same minimum market cap, minimum share price, or corporate governance requirements as companies trading on the NASDAQ or NYSE. This could be bad news for those eager to get in on 3D printing stocks, but have little experience with trading, because such companies can use the fact they’re traded to make themselves appear legitimate in order to attract investment capital from trading n00bs, without delivering in the way that a company with strong financials might. And nanalyze warns that 3D Pioneer Systems may not have strong financials:
As of January 2014, 3D Pioneer had $17,497 cash on hand which accounted for all of their total assets and notes payable amounting to $76,923. With a current market cap of over $30 million, it’s difficult to see just what you are buying should you acquire shares in 3D Pioneer…Another recent 8-K filing announced the appointment of Joshua O’Cock as Chief Marketing Officer. Joshua’s CV states he is the “Web and Social Media Officer” at the University of Manchester having achieved his Bachelors degree just 4 years ago. This is hardly the C-level experience that a tenured CMO should bring to the table. Yet another 8-K filing this year announced that 3D Pioneer now has access to a $500,000 draw down for future financing. Just how much can be accomplished with such a small amount of money and such lofty aspirations?
This isn’t the first company to try to grab hold of the 3D printing excitement by trading stock on the OTCBB, or even one that did so with the apparent hopes of confusing themselves for 3D Systems to investors. On November 7 of last year, a company called Makism started trading under the symbol MDDD with a similarly ‘iffy’ background.
Both companies have somewhat legitimate looking websites and renderings of the printers they’re working on, but it’s important to remain sceptical. That doesn’t mean that they won’t actually deliver on their products. But in the words of Public Enemy (and a few others besides): Don’t Believe the Hype.
Source: nanalyze
