Jan 7, 2020 SmileDirectClub snags a spot at Walmart — but not with its core product Read More Prime real estate... Walmart is Earth's biggest retailer — Now SmileDirectClub will sell its mouth-flattering goods exclusively on Walmart's website and across its 3,800+ US stores. One of the worst IPOs of 2019, SDC shares popped 25% on news of the partnership. The awkward part? The partnership doesn't even include their core product.
Before: SDC is a direct-to-consumer brand, selling its clear braces-replacing aligners from its own website (like DIY Invisalign).
After: SDC-branded electric toothbrushes, tooth-whitening kits, dental device cleaners — they're all new, and will now be sold at Walmart.
MIA: Its go-to clear aligners will stay exclusively on SDC's website and its SmileShop locations.
More like Smile InDirect... SDC's strategic move to go off its own website and into another retailer isn't totally fresh — its online-first, direct-to-consumer cousins made similar moves: Casper mattress, Harry's razors, and Quip toothbrush all now sell in Target stores. But SmileDirect's the only one to keep its core product to itself.
Side note: Walmart will see how SDC's products do with its lower-income customers before possibly setting up full SDC shops within its stores.The Takeaway:This is SDC's top-of-funnel strategy... How do you warm people up for a bigger commitment, more expensive core product? Offer them gateway goods instead. SDC's main teeth-straightener costs nearly $2,000. An SDC electric toothbrush in color "blurple" costs just $25.
First date: SDC earns your trust through its cheaper, low-commitment options at Walmart.
Marriage: Then, after months of keeping your teeth white with SDC products, maybe you'll feel ready to put a ring (or an aligner) on it. Oct 15, 2019 SmileDirectClub plummets (another) 13% on California's new ortho-regulation Read More Everyone gets a trophy... including SmileDirectClub. The worst new stock of 2019 is now down 53% from its IPO day. SmileDirectClub embraces "telemedicine" to straighten your teeth, using clear aligners and online video chats to replace painful in-person ortho appointments. But the stroke of a governor's pen just made its life a bit harder.
AB-1519 will see you now... That's the California bill just signed into law. It adds additional regulation for SmileDirect to deal with while providing additional protection to aspiring grinners. Now the state Dental Board will oversee all things teeth-fixing — this doesn't ban SmileDirect's business, but investors are still unhappy.
Your neighborhood orthodontist: She's getting disrupted by SmileDirect's straighten-from-home biz model. She also thinks braces deserve in-person, un-rushed attention.
The dental lobbyists: They represent that community of concerned orthodontists, so they encouraged California's government to make the move.
Your canines: They're not affected. Yet. SmileDirect said it will keep operating in California, but the bill “will create unnecessary hurdles and costs."The Takeaway:SmileDirectClub predicted this... A company's IPO filing paperwork (aka its "S-1") is released before its stock first begins trading, highlighting the business' risks and opportunities. SmileDirectClub's S-1 mentioned this exact concern: “Adverse changes in, or interpretations of, laws and regulations governing remote healthcare and the practice of dentistry."
The dental pros resisting SmileDirect are better-funded and organized than the taxis that resisted Uber... Sep 26, 2019 Endeavor cancels its IPO the night before it was supposed to happen Read More They're supposed to be celebratory... IPOs feel like graduation or getting your Instagram account verified. But 2019 — the year of the tech IPO — has been the opposite. Talent agency Endeavor just canceled its IPO less than 24 hours before it was supposed to happen. This is the entertainment company that repped Denzel and owns half of Ultimate Fighting Championship.
There are fewer rainbows out there for unicorns lately... That's why Endeavor dipped out. The share price that a company IPOs at matters to its existing investors — they own stock in the private company and want to eventually sell once it becomces public. Here's what's happened to stocks lately once they IPO:
Uber & Lyft are down 31% and 43% as investors wonder if they'll ever become profitable.
SmileDirectClub and Slack both had painful starts, down 36% and 42%.
Peloton is only 1 day in but already sweating.
WeWork is a whole different category — Its valuation was $47B the last time it raised money from private investors, and could be re-priced down to a $15B valuation (or less) when/if it IPOs.The Takeaway:Private markets were hype, public markets are reality... In 2017, SoftBank scrapped together $100B from insanely wealthy people, companies, and countries to invest huge sums in startups. The venture capital firm gave Uber, WeWork, and Slack gigantic checks to fund their growth, also driving their valuations up. But Wall Street's been more skeptical, slashing those valuations by hammering their stock prices. Now unicorns might wait to IPO until their chests grow profit hairs. Sep 13, 2019 SmileDirectClub drops 28% on its IPO, earning a (bad) superlative Read More First impressions... They're supposed to be SmileDirectClub's thing. Shares dropped 28% on its 1st day of trading as the unicorn transformed into a public company — that makes it the worst-performing major IPO since 2000. But it doesn't change its goal: "democratize access to a smile you’ll love."
"Serious concerns"... That's what orthodontists think of SmileDirectClub's biz model. The canine-disruptor has harmoniously combined online with offline to straighten teeth for less than those concerned traditional dental offices:
"Telemedicine" = Online: SmileDirectClub sends you a tooth-mold impression kit to create a clear aligner, but your check-ups are done remotely through a doctor online — just like hair loss/ED startup Hims.
"SmileShops" = Offline: It's built 300 aggressively-lit "SmileShops" if you crave hands-on, in person help with those biting molds.
The Result: SmileDirectClub claims its treatment costs $1.9K (vs. $6K-$8K for traditional braces) and it takes 6 months on average (vs. 18 months).The Takeaway:The IPO was a failure, but getting there was a huge success... There are 2 types of investors - existing/early shareholders (like venture capitalists and Golden State Warrior Draymond Green) and new investors (anybody who bought shares at the IPO). While the new shareholders' stock fell on Day #1 (IPO stocks are volatile), the existing shareholders have enjoyed SmileDirectClub's value rise.
August 20th, 2019: SmileDirectClub issued its S-1 statement to go public, last valued at $3.2B.
September 11th, 2019: Investor enthusiasm during the week-ish long roadshow let SDC set the price of shares at $23, valuing the company at $8.9B.
Yesterday: The stock price fell big, but its value is still almost $7B — more than double its last official valuation when it started the process.