3D Printering: The Makerbot Class Action Suit

Since the 5th generation of Makerbot 3D printers were released at CES in 2014, there has been an avalanche of complaints about the smart extruder in these printers. Clogs were common, and the recommended fix was to simply replace the extruder. The smart extruder is a $175 part, and the mean time before failure is somewhere between 200 and 500 hours. With these smart extruders, you’re looking at a new extruder every dozen prints or so. Combine this with Makerbot’s adbication of open source values, and it’s easy to see why no one in the know would buy a Makerbot.

The performance of the 5th gen Makerbots is also reflected in the Stratasys stock price. The stock has tanked, from a high of $130.83 in early 2014 to a low of $31.88 a few days ago. This has investors calling for blood, and now there’s a class action suit claiming Stratasys violated securities laws. The court docs (PDF, 125 pages) allege Stratasys rushed the 5th gen Makerbots into production resulting in an avalanche of negative feedback, warranty claims, returns, and misled investors until the stock collapsed when the market was made aware of these issues.

The court documents allege Stratasys and Makerbot touted the incredible ease of use and ‘unmatched’ quality of the 5th generation of Makerbots, while former Makerbot employees confirmed known issues with the smart extruder. The 5th gen Makerbots were rushed into production without proper testing for performance and reliability and no standardized testing and validation program. In short, Makerbot itself didn’t know how bad the smart extruder was, but shipped the product anyway. This in turn hurt sales, with one sales executive leaving the company as he “did not want to sell the 5th generation printers after learning about the defect issues because he has a ‘conscience’.”

Despite this, those in charge at Makerbot and Stratasys continued to make misleading  positive claims about the reliability of their printers and how the printers were received by the market. This is the crux of the lawsuit, and something that points to an artificially inflated stock value.

The plaintiffs for this lawsuit are limited to Stratasys stock holders, and anyone out there who only owns a 5th gen Makerbot will sadly be ignored in this lawsuit. Still, if the claims of this lawsuit are true, Stratasys and Makerbot are in for a world of hurt; this is an alleged violation of federal securities laws. demanding a jury trial. Popcorn abounds, and as always, [Zach] and [Adam] came out ahead.

Filed under: Hackaday Columns

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