SmileDirectClub IPO has sad debut

By IPOsFOXBusiness

IPO headaches for WeWork, SmileDirectClub

Equityzen CEO Atish Davda shares why SmileDirectClub and WeWork are struggling on the stock market.

Online dentistry startup SmileDirectClub's IPO is putting a frown on investors. The shares slid at the open after pricing at $23 per share.

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TickerSecurityLastChange%Chg
SDCSMILEDIRECTCLUB INC COM USD0.0001 CL A18.68+2.01+12.06%

The 58.5 million shares were set to raise $1.3 billion but that is less likely based on the dud debut.

SmileDirectClub sells custom clear orthodontic aligners that shift crooked or out-of-place teeth. After visiting one of the company’s more than 300 locations for a 3-D imaging session or using an at-home impression kit, each set of aligners shift a customer’s teeth closer. SmileDirectClub said it takes an average of six months for teeth to reach the desired position.

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Alex Fenkell and Jordan Katzman founded the Nashville-based SmileDirectClub in 2014. The company had $423 million in revenue last year, compared to $145 million the year before. It took a net loss of $74 million last year, up from $32 million the year before, as its spending on marketing and other expenses rose sharply.

A SmileDirectClub subscription starts at $1,895, which it said is much less costly than traditional orthodontic models. Its service also requires no in-person visits.

The company has the endorsement of Golden State Warriors forward Draymond Green, who is both a customer and a stakeholder in the business. After wearing braces for five years and breaking a retainer, he eventually ended up with SmileDirectClub to straighten his teeth.

“It’s easy to just grab it and go and then I can change on the road,” he said in a promotional video. “I did photoshoots with my liners in — you can’t see them.”

The company said it’s had more than 700,000 customers and it represents more than 95 percent of the doctor-directed al-home clear aligner industry. SmileDirectClub also said it has a lot of room to grow in the U.S. and world orthodontics markets, which it valued at $945 billion.

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