SmileDirectClub Files For Chapter 11 Bankruptcy Just Four Years After $1.35 Billion IPO

SmileDirectClub Inc. SDC, a dental aligner manufacturer, has filed for bankruptcy conscionable a fewer years aft its singular $1.35 cardinal IPO.

What Happened: The Nashville-based institution made its Chapter 11 declaration successful Texas this past week. The move volition let it to prolong operations portion formulating a strategy to settee its debts.

As a portion of the revival plan, the company's founders are acceptable to pump a minimum of $20 cardinal backmost into the business, according to Bloomberg.

SmileDirectClub introduced integrative aligners, presenting a much affordable alternate to age-old braces, and took a direct-to-consumer selling approach.

Also Read: SmileDirectClub's Return On Capital Employed Insights

The company's valuation soared to $8.9 cardinal successful its 2019 IPO, elevating its founders to billionaire status.

However, the post-IPO signifier was riddled with obstacles. The institution grappled with decreasing revenues and remained unprofitable. A patent tussle with a competing steadfast further strained its resources.

The onset of the pandemic dealt an further blow, compelling the institution to slash its income and promotional activities.

While SmileDirectClub pioneered the direct-to-consumer dental aligner market, it faces stiff contention from brands similar Invisalign, which is owned by Align Technology, Inc ALGN; Candid; Byte, which is owned by Dentsply Sirona Inc XRAY; NewSmile; and ALIGERNCO. These competitors person been vying for a stock of the lucrative dental aligner market, further intensifying the challenges for SmileDirectClub.

Align closed Friday's trading league astatine $305.32. Dentsply Sirona closed astatine $34.16. SmileDirectClub closed astatine $0.42 pursuing the bankruptcy announcement. 

Now Read: SmileDirectClub Reports Second Quarter 2023 Financial Results

This contented was partially produced with the assistance of AI tools and was reviewed and published by Benzinga editors.

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