Taking a Wild Ride on the Hype Cycle

NEW YORK ( TheStreet) -- Rock Hill, S.C., 40 miles south of Charlotte, N.C., along I-77, has a modern city hall, a cute, renovated downtown area and a place at the peak of the Hype Cycle, a Gartner graph describing the process of how markets adopt technology.

Rock Hill earned this honor by being home to a company called 3D Systems ( DDD), which makes a line of three-dimensional printers ranging from the $1,300 Cube to models that cut metal with lasers.

The company is presently selling $100 million worth of printers each quarter, but thanks to the hype cycle the company is worth $4 billion on the New York Stock Exchange.

The hype went into overdrive last week when its main rival, Stratasys ( SSYS), bought tiny MakerBot, which makes its Replicator printers in Brooklyn, N.Y., for $403 million.

As Crain's New York Business reports, MakerBot, founded in 2009, has made just 22,000 Replicators and Replicator 2s, which sell for a few thousand dollars each.

Under the deal Stratasys will issue approximately 4.76 million shares and exchange them for all MakerBot's stock. This gives MakerBot a 15.4% stake in Stratasys, despite estimated sales for the first quarter of $11.5 million.

Stratasys was willing to pay 10 times revenue for MakerBot because it needs a low-end printer, and because MakerBot also owns Thingiverse, a design market for 3-D printing files. CEO Bre Pettis is the cover boy of the space, speaking regularly at hacker congresses, appearing on the cover of Wired, and hanging out with people like MIT Media Lab head Joi Ito.

Chuck Hull, who founded 3D Systems, is more of a Rock Hill kind of guy. Now 74, he took out the first patent on stereolithograph , which is at the heart of the industry, in 1986. Hull is more comfortable talking with the international society for optics and photonics than he would be keynoting South by Southwest, as Pettis has done.

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