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3D MetalForge (ASX:3MF) share price sinks on IPO

A businessman in front of a computer with his head on his hand in disbelief, indicating poor IPO or share price performance
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Investors are talking about the 3D MetalForge (ASX: 3MF) share price following yesterday’s initial public offering (IPO) and ASX debut.

Listing at 12noon yesterday, the 3D printing company debuted at 35 cents a share and quickly plummeted 24.29%, closing its first trading day at 27 cents. Despite a minor lift in trading today, the 3D MetalForge share price dropped even lower, trading at 26 cents at the close.

Let’s review what the business does and how the 3D MetalForge IPO went down.

3D MetalForge IPO at a glance

On 21 December 2020, Singapore-headquartered 3D MetalForge Limited lodged a prospectus with the Australian Securities and Investment Commission (ASIC) regarding the company’s IPO and admission to the Australian Securities Exchange, ASX Ltd (ASX: ASX).

According to the prospectus, the company set out to raise a minimum of $8 million and a maximum of $10 million through the issue of shares at an issue price of $0.20 per share under the public offer.

The 3D MetalForge IPO stopped accepting applications from investors after achieving its maximum subscription of $10 million.

So what exactly does 3D MetalForge do?

3D MetalForge specialises in additive manufacturing production, better known as 3D printing. 

The company produces additively manufactured parts at scale and provides a suite of additional business services. These include consulting, engineering, design optimisation as well as printing and production services.

3D MetalForge claims to offer an advanced range of printing equipment. Its Directed Energy Deposition (DED) printers can produce high-quality metal parts of up to 1.5m in size at a speed of up to 750 grams per hour.

Since 2012, the business says it has printed more than 20,000 parts on its 26 printers. The work extends across 1,300 projects for clients in 20 countries.

Looking ahead

Following the 3D MetalForge IPO, the company plans to proceed with its business and expansion strategy. 

This includes expanding the production capacity at its current Additive Manufacturing Centre in Singapore and upgrading its office in Houston to a production centre. 3D MetalForge will also open sales and marketing centres in Australia, the Middle East and Europe.

The Singapore expansion and Houston upgrade are targeted for completion by 30 June 2021. Sales and marketing activities will continue over a 24-month period.

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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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