SmileDirectClub, a tooth alignment outfit, has filed for Chapter 11 bankruptcy protection. The company has struggled with losses, weak sales for clear aligners, and a significant amount of debt. However, SmileDirectClub plans to continue operations with an investment of at least $20 million from its founders. Up to $60 million of additional capital may be available under certain conditions. Despite the restructuring, the company’s stock had already plummeted 97% to $0.42 before the bankruptcy filing.
Founded in 2014, SmileDirectClub went public in September 2019 but has since faced challenges in turning a profit. The company expanded its product offerings to include teeth whitening, overnight retainers, and lip balm, but it has struggled to compete with Invisalign maker Align Technology. In addition, SmileDirectClub faced criticism over the safety of its aligners following consumer complaints of tooth damage. The company’s stock price and market cap have taken a significant hit as a result. While SmileDirectClub has outlined cost-saving measures, Wall Street remains cautious due to concerns about the effectiveness of its strategies.
In conclusion, SmileDirectClub has sought bankruptcy protection due to its financial struggles caused by losses, weak sales, and a substantial amount of debt. The company will continue its operations with an investment from its founders, but its stock price has already plummeted. SmileDirectClub has faced challenges in turning a profit and competing with its rivals in the clear aligner market. Despite outlining cost-saving measures, Wall Street remains skeptical of the company’s future success.