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Oct. 9, 2019, 7:11 a.m. EDT

Just one day after a short seller slammed SmileDirectClub, all 10 banks on its IPO rate it a buy

JPMorgan assigns stock a price target that is double its current price in glowing report on teeth-straightening startup

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By Ciara Linnane, MarketWatch

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See: Where to find low-cost services for all the things Medicare doesn’t cover

The company’s approach claims it requires no meetings with dentists or orthodontists, although dentists and orthodontists maintain that thorough oral exams are needed before undergoing any orthodontic procedure.

See: Are dentists hooking patients on opioids?

“We communicated with one customer who was forced to use wire cutters to remove SDC products after he struggled to breathe,” said the report. “Review sites are replete with other horror stories of customers who had to take emergency dentistry into their own hands.”

For more on Hindenburg’s report: SmileDirectClub’s stock falls and then recovers after scathing report from short seller | Read the report at HindenburgResearch.com

SmileDirect responded on Friday with a lengthy statement that hit out at “organized dentistry” and its “anticompetitive legal actions.”

“We will vigorously defend ourselves and our business model in order to continue to pursue our company’s mission to increase access to affordable, safe and convenient teeth straightening solutions,” the statement read.

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At the third Democratic debate, candidates argued over which health care plan would lower consumer costs the most. Photo: Robyn Beck/Agence France-Presse/Getty Images

The company is scheduled to report third-quarter earnings on November 12. But in its IPO filing, it disclosed sales of $423 million in 2018, up from $146 million a year earlier. But losses grew to $74.8 million in 2019 from $32.8 million in 2018, as MarketWatch reported at the time. The company had a net loss of $52.9 million in the first six months of 2019.

See: SmileDirectClub went public: 5 things to know about the teeth-straightening startup

SmileDirect said it would use the proceeds of the deal to pay bonuses, to fund taxes and other obligations relating to its incentive bonus agreements, to redeem LLC units from pre-IPO investors and to fund a dividend to those investors, with the rest to be spent on general corporate purposes, according to the company’s prospectus.

The Renaissance IPO ETF /zigman2/quotes/207665280/composite IPO +0.78% was up 0.4% Monday and is up 23% on the year, outperforming the S&P 500’s /zigman2/quotes/210599714/realtime SPX +1.39% 17% gain and the Dow Jones Industrial Average’s /zigman2/quotes/210598065/realtime DJIA +0.83% 14% gain.

US : U.S.: NYSE Arca
$ 69.69
+0.54 +0.78%
Volume: 545,646
Jan. 20, 2021 8:00p
+52.94 +1.39%
Volume: 2.34B
Jan. 20, 2021 4:58p
US : Dow Jones Global
+257.86 +0.83%
Volume: 384.98M
Jan. 20, 2021 4:58p

Ciara Linnane is MarketWatch's investing- and corporate-news editor. She is based in New York.

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