The following is from an email sent by Whitney Tilson of Kase Capital to ValueWalk. For further context see- Tilson Loves 3D Systems As a Short and  Whitney Tilson On DDD ‘Mark my words – This Will End Very Badly’; Still Short Tesla

Whitney Tilson

About to land in Orlando – here for 48 hours at the ICR XChange Conference (, where 115 consumer-oriented companies (mostly retailers and restaurants) will present. It’s a great conference if you’re interested in this sector. I learned a lot at last year’s (my first).

Whitney Tilson K12 Questcor Pharmaceuticals QCOR
Courtesy of Kase Capital

1) I was at the Consumer Electronics Show in Las Vegas for a day last Tuesday – my first time – and really enjoyed it. My takeaways:

a) CES was a total blast for a gadget fiend like me.

b) I met with the CFO of a small-cap company that is one of my newest stock positions (I’ll be publishing an article about it soon).

c) I have more conviction than ever in my short positions in 3D Systems Corporation (NYSE:DDD) and Tesla Motors Inc (NASDAQ:TSLA).


2) Re. DDD, it had the largest booth in the 3D printing area of the convention hall (which included maybe 15-20 companies), filled with all sorts of printers, ranging from the new Cube (which it says will retail for under $1,000) on up. The printers were all furiously at work – but doing little more than producing little plastic trinkets. I was really expecting to find myself lusting after one of these machines, but was sorely disappointed. I understand 3D printing’s usefulness for industrial uses like producing prototypes – a business that’s been around for many, many years – but utterly fail to see any chance of widespread consumer adoption like. Yet the hype and valuations in the sector presume that 3D printing is going to be as revolutionary as the iPhone or iPad. What a crock!


My other big takeaway from spending an hour in the 3D printing area of CES was the fierce competition – more than a dozen companies were showing off 3D printers that appeared very similar to those of DDD. Heck, there was even a low-end, generic Chinese manufacturer with a printer for $499. In short, this looks like a business that is already becoming highly commoditized – which likely explains why DDD’s margins have declined for each of the past two years.


So far, though, “investors” don’t seem to care, having bid the stock up in a speculative frenzy such that DDD now trades north of 20x REVENUES!


3) During CES, DDD announced that it appointed as its Chief Creative Officer. This ranks up there with the silliest things I’ve ever seen. When (not if) this stock collapses, we’ll look at this as a sure sign of the top… I challenge you to read the press release and keep a straight face. Here’s the beginning:

3D Systems (NYSE:DDD) today announced that, global entertainer, entrepreneur and philanthropist, joined 3DS as its Chief Creative Officer. In this leadership role, will inspire, shape and drive all of 3DS’ initiatives to mainstream the use of 3D printing through major collaborations with creative brand partners, innovative global campaigns and educational grand challenges designed to grow the popularity of 3D printing.

The addition of to the 3DS team brings tremendous talent, vision and influence, and underscores the company’s commitment to democratize 3D printing. 3DS plans to leverage‘s international creative industry network to immediately extend its reach into select high-end fashion accessories houses, leading entertainment and life style brands and key corporate sponsored educational and sustainability initiatives.

Note that was an early 3D visionary, having featured a 3D Printer in his Dec. 2012 video for the song “Scream and Shout” with Britney Spears. Alas, the printer used in the video was a MakerBot Replicator (MakerBot was purchased by DDD competitor, Stratasys, last June):
4) This deal reminds me of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s deal with Alicia Keys, announced a year ago when BBRY was at $16.60 (it closed Friday at $8.76). Below is an article about it that begins:

When Alicia Keys was first named global creative director at BlackBerry on Jan. 30, 2013, much derision was made at her expense for tweeting from an iPhone just days before the announcement  – and maybe even once again a few days after, in an apparent hack scandal.

But Thursday’s (Jan. 2) news that Keys was ending her one-year partnership with the brand comes at a time when BlackBerry is the only party with egg on its face. The company is capping off a tumultuous 2013 that saw the company seeking, and ultimately rejecting, a $4.7 billion takeover bid from Fairfax Financial Holdings, a house-cleaning of its top executives, including CEO Thorsten Heins, chief marketing officer Frank Boulben and chief operating officer Kristian Tear, among others, and the failed launch of the BlackBerry Z10, a would-be competitor to the iPhone.

“BlackBerry and Alicia Keys have completed our year-long collaboration,” the company said in a statement Thursday. “We thank Alicia for her many contributions including providing creative direction for the BlackBerry Keep Moving Project which attracted more than 40 million visits, advocating for women in STEM and launching the BlackBerry Scholars Program. We have enjoyed the opportunity to work with such an incredibly talented and passionate individual.”

In the first few months of 2013, Keys was singled out as the latest in a trend of celebrities – particularly musicians – taking on “creative director”-like roles at major brands like Diet Coke (Taylor Swift), MasterCard and Bud Light Platinum (Justin Timberlake), Intel and Coca-Cola (, Monster Audio (Keys’ husband Swizz Beatz), and just last month, PepsiCo’s Aquafina Flavor Splash (Austin Mahone). But just how meaningful were these partnerships, which were carefully worded so as not to seem like glorified endorsements?

5) The only bubble rivaling DDD is Tesla Motors Inc (NASDAQ:TSLA), which wasn’t at CES, but a major emerging competitor, BMW, was – and it was showing off two very impressive cars, the new i3 and i8, that I believe are the “twin Tesla killers”. I took a test drive of the i3 and checked out the i8 in the showroom – see my photos below (that’s my dad with me in the third picture).

The i8 is an AMAZING car that is directly aimed at the high-end current Tesla buyer (and at $137k fully loaded, it’s not much more expensive), while the i3, a great car priced around $43,000 (before incentives), will be a strong competitor to the new Tesla X – and it’s already hitting the market now, more than a year ahead of the X!

The i8 (which will start being delivered mid-year and, I hear, is sold out for two years) has an electric motor in the front with only 20-22 miles of range – but that’s enough for the great majority of trips for the guys who’ll be buying this car. And unlike Tesla, it doesn’t need a special charger – just plug it into a regular outlet (or ideally a regular 220 outlet) and it fully charges overnight.

In the back of the i8 is a gas engine which is

1, 23  - View Full Page