Why Nano Dimension Stock Was Sinking This Week

3D printing company Nano Dimension (NASDAQ: NNDM) probably can't wait for the weekend to come. Its stock took some significant hits over the past few days in response to a court ruling and management's reaction to it. As a result, the shares were trading down nearly 22% week to date as of early afternoon Friday, according to data compiled by S&P Global Market Intelligence.

The gavel falls

That judgment was handed down on Monday, and it set the tone for the rest of the week. A Delaware Court of Chancery judge ruled that Nano Dimension was obligated to move forward with its deal to acquire a peer company, Desktop Metal (NYSE: DM).

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In July, concurrent with the release of its second-quarter 2024 results, Nano Dimension announced it had agreed to buy Desktop Metal for as much as $183 million in cash. However, in what was apparently a case of (would-be) buyer's remorse, Nano Dimension tried to retreat from the arrangement, and not surprisingly, Desktop Metal filed a lawsuit over its conduct regarding the deal.

The court's ruling stipulated that Nano Dimension had materially breached the agreement between the two companies, among other findings. The court also ordered it to effectively close the deal by March 31.

Can two be better than one?

Two days after the judgment was handed down, Nano Dimension expressed disappointment at the outcome, but pledged to finalize the acquisition in a timely manner.

Although resources could have been conserved if the company had effected the deal more properly and smoothly, it's good that the battle is over and a resolution is likely at hand. Investors should now focus on how the combined entity will compete, and whether the two pieces can fuse together well.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.