3D Systems shares plunged 5.25% to $10.28 on Wednesday after it announced that Avi Reichental has stepped down as President and CEO of the company. Reichental led the company for 12 years. 3D Systems has appointed Chief Legal Officer Andrew Johnson as interim CEO, and established an executive management committee to support operations and strategic initiatives.
It was ‘mutual agreement’ with the board
The Rock Hill-based 3D printing company didn’t give reason for his resignation. However, 3D Systems said it was “mutual agreement” with the board. Reichental’s resignation came into effect on Wednesday. S&P Capital IQ analyst Angelo Zino said the outgoing CEO was “pushed out” due to the company’s struggles and investor frustration over the last couple of years.
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3D Systems shares rose to an all-time high of $97 in January 2014 when 3D printing was seen as the next big thing. The stock has lost almost 88% of its value since then as investors questioned the market viability of consumer 3D printing. 3D Systems’ revenue in the second quarter rose only 13% to $170.5 million, missing analysts’ projections. The company’s full-year revenue is expected to grow only 9% in 2015, down from 27% last year.
Legal troubles haunt 3D Systems
Talking about Reichental’s resignation, 3D Systems co-founder Charles Hull said the 3D printing industry continues to evolve, and the company is focused on aligning its resources to best serve the customers. The company has also been facing legal issues. Recently, some investors filed a class action lawsuit against 3D Systems, accusing the company of deceiving investors by making misleading and false statements.
3D Systems has also lost an arbitration case to Ronald Barranco, who co-founded Print3D that was acquired by 3D Systems in 2011. The Rock Hill-based company had promise to pay Barranco a share of revenue from Print3D for three years. But it fired him after 20 months without giving a reason. The arbitrator has ordered the company to Pay Barranco $11.2 million.
3D Systems shares were down 1.07% to $10:17 in pre-market trading Friday.