Teeth-straightening startup SmileDirectClub tumbled in its stock market debut (SDC)

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Alex Fenkell Jordan Katzman Smile Direct Club

The digital health company SmileDirectClub tumbled in its trading debut on Thursday.

The company had priced its shares at $23 apiece on Wednesday, but opened below that at $20.55. As of early Thursday afternoon, the stock was trading down 15% at $19.50. 

The Nashville, Tennessee-based SmileDirectClub sold 58.5 million shares, raising $1.3 billion in the offering. The $23 a-share price valued SmileDirectClub at $8.9 billion. 

SmileDirectClub sells clear aligners for teeth, an alternative to what you might get from an orthodontist. While it typically costs $3,000 to $7,000 to get traditional braces or Invisalign-brand aligners, SmileDirectClub goes for a fraction of that — you can either pay $1,895 up front or $2,290 spread out over two years.

Read more: These 10 buzzy digital health startups are poised to go public in the next 12 months

Smile Direct Club brightening

The idea behind SmileDirectClub is to make straightening teeth more affordable by cutting out the steps of going in person to a dentist or an orthodontist to get braces or other alignments. The company was started by Alex Fenkell and Jordan Katzman in 2014.

In October, SmileDirectClub raised $380 million from the private-equity firm Clayton, Dubilier & Rice and the venture firms Kleiner Perkins and Spark Capital. The round valued the company at $3.2 billion, up from $275 million just two years earlier.

Read more: SmileDirectClub’s IPO could make the startup’s top investors into billionaires.

According to the IPO filing, SmileDirectClub’s net loss widened from $33.8 million in the first half of 2018 to $52.9 million in 2018. The company increased its customer count from 22,000 in 2016 to about 246,000 in the first half of this year.

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