Shorts stung as the Desktop Metal (DM) stock goes vertical

Desktop Metal (NASDAQ: DM) stock price has gone parabolic, hurting short-sellers who believe that it should continue falling. It jumped by over 16% on Thursday, making it one of the best-performing companies in Wall Street. It is up by over 115% from its lowest point this year and is trading at its highest point since November last year.

Desktop Metal’s stock performance is notable because it is one of the most shorted companies in Wall Street. Data by MarketWatch shows that it has a short interest of 33% as 68 million shares have been shorted. 

It is not clear why the Desktop Metals stock price has gone parabolic since the company has not made any headlines in the past few weeks. The most recent news came out on March 18th when it published its quarterly financials that beat analysts’ estimates.

Desktop Metal’s revenue dropped to $52.3 million in the fourth quarter, down from $60.6 million a year earlier. For the year, its revenue came in at $189.7 million from $209 million in the previous year. This decline happened as the 3D printing industry saw no growth as the CEO noted:

“Our industry was flat in the past year, but we expect it to go back to double-digit growth over time as CFOs get accustomed to this new environment.”

Desktop Metal has offset this slowdown by cutting its costs. In 2022, it announced an initiative to slash costs by $100 million. It followed this with another $50 million cost-cutting plan in 2023. As a result, its total net loss dropped from $740 million in 2022 to $323 million in 2023.

To be clear: long-term Desktop Metal’s short sellers have made a fortune over time as the stock has crashed from $34.87 in January 2021 to $0.9747.

DDD vs XMTR vs SSYS vs DM stocksDesktop Metal is not the only 3D printing company that has tumbled as the industry slows. 3D Systems (DDD) stock price has plunged from a high of $56.47 in 2021 to $4 today. Similarly, Stratasys (SSYS) share price has also retreated from $56.92 to $10.95 while Xometry (XMTR) has retreated from $97.4 to $17.4

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