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SmileDirectClub (SDC) starts trading on Nasdaq



Online dental company SmileDirectClub shares slid 15% Thursday after opening $ 20.55 for a share in the stock's market debut.

The company priced its IPO at $ 23 per share on Wednesday, above its expected range of $ 19 to $ 22. SmileDirectClub sold 58.5 million shares, raised $ 1.3 billion and valued online dental companies at $ 8.9 billion. Thursday's move would value the company at about $ 7.7 billion.

The Nasdaq stock portfolios under the ticker symbol SDC.

"You know, we're here to build long-term value with the stock," SmileDirectClub co-founder Alex Fenkell said Thursday in an interview with CNBC's Leslie Picker. "How [the stock] is priced today I think is not going to dictate what we do here."

The startup, which was founded in 201

4, sells tooth adjustments directly to consumers on its website and in its "SmileShops" starting at $ 1,895 for a two-year plan. Founders Fenkell and Jordan Katzman want to disrupt the jaw orthopedic industry with less expensive dentist treatments, conveniences and splashy advertising for TV and social media.

The company reported revenue of $ 423.2 million last year, an increase of 190% from $ 146 million reported in 2017, according to the prospectus filed last month. It posted a net loss of $ 74.8 million last year, more than double the loss of $ 32.78 million in 2017.

Acquiring new customers is expensive. SmileDirectClub spent $ 289.3 million on marketing and general expenses last year.

Jordan Katzman's father, David Katzman, funded SmileDirectClub's seed round through his venture fund, the Camelot Venture Group, and is the company's CEO. Camelot invests in direct-to-consumer brands, such as 1-800 Contacts and Quicken Loans.

David Katzman's brother, Steven Katzman, is the head of operations. In total, the Katzman family retains more than 65% of the voting power between the three men following the offer. CEO David Katzman alone will have nearly 30% of the vote with 87 million B shares, which controls 10 votes for every 1 vote offered with an A share.

SmileDirectClub operates more than 300 locations, according to the original prospectus. It has also partnered with Walgreens and CVS to open "SmileShops" inside their pharmacies.

Customers can visit a SmileShop to get someone to scan their teeth and create a 3D image, which SmileDirectClub then uses to create a custom aligner. They can also order a set online and send back an impression.

The Nashville, Tennessee-based company plans to use the proceeds of its IPO to fund international expansion and research and development, according to the filing. SmileDirectClub's aligners are currently available in the US, Canada, Australia and the United Kingdom.

-CNBC & # 39; s Elijah Shama contributed to this report


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