SmileDirectClub Beams From Ear-to-Ear 😄

by 16 Jan, 2020

SmileDirectClub Beams From Ear-to-Ear

SmileDirectClub (SDC) was the hottest tech unicorn in the orthodontic space last year until losing that title after an IPO (initial public offering) flop.

The company taps people’s fear of the dentist, offering a less-expensive teeth straightening service from home through the power of 3D imaging technology. Akin to how Warby Parker issues eyewear prescriptions, customers who sign up for SmileDirectClub receive impression kits in the mail for molding their aligners. They get matched with a dentist who then prepares the double-decked pecker wreckers, which are packaged, stamped, and sent in the post again. 

It’s a company built on smiles, but investors were left forlorn last September when shares tanked 15% at their initial public offering. With horror stories going viral and the American Association of Orthodontists (AAO) filing complaints, it seemed that only one in ten dentists recommended SmileDirectClub!

The stock closed the year down 62%, prey for short-selling investors looking to make a quick buck. However, bulls may finally have reason to crack a smile!

Four years ago, SmileDirectClub partnered up with Align to make the mouth metal from customers’ teeth impressions. Align owned 17% of SmileDirectClub worth close to 50-million-dollars, but it cashed out after SDC listed as a billion-dollar company, letting their manufacturing agreement fizzle out without renewal. Sad, but a blessing in disguise!

Now, SmileDirectClub can embrace a new business model aimed at reversing its stock market fortunes. A name change may be in order, as instead of running a direct-to-consumer model, the firm will now partner up with many local dental offices. These are the very same dental practices who complained about the workmanship not being up to scratch in a mail-order service. However, keen to diversify into aligners (the competitor to traditional braces), it’s likely they will accept SDCs advances.

This is a fundamental change in the underlying business of SmileDirectClub. Shares rose 17% in yesterday’s session as the company went indirect. The question now, however, is can the company build more upward momentum in 2020?

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