Online dentistry company SmileDirectClub declined 15% on Thursday after opening an IPO of $ 20.5 per share. SmileDirectClub sold 58.5 million shares, raised $ 1.3 billion and valued the online dental company at $ 8.9 billion. The move on Thursday would value the company at around $ 7.7 billion.
The stock is traded on the Nasdaq under the symbol SDC.
"You know we're here to add long-term value to the stock." SmileDirectClub co Alex Fenkell said Thursday in an interview with Leslie Picker from CNBC. "How [the stock] the price looks like today, in my opinion, will not dictate what we are doing here."
The startup, founded in 201
The company generated $ 423.2 million in revenue last year, up 190% from $ 146 million in 2017 according to its prospectus filed last month. Last year's net loss was $ 74.8 million, more than twice the net loss of $ 32.78 million in 2017.
Gaining new customers is expensive. SmileDirectClub spent $ 289.3 million on marketing and general spend last year.
Jordan Katzman's father, David Katzman, funded the SmileDirectClub start-up through its Camelot Venture Group venture fund and is CEO of the company. Camelot invests in direct-to-consumer brands like 1-800-Contacts and Quicken Loans.
David Katzman's brother, Steven Katzman, is the Chief Operating Officer. The Katzman family will together retain more than 65% of the voting rights between the three men. CEO David Katzman alone, with 87 million Class B shares, will hold close to 30% of the vote, equaling 10 votes for each vote cast for a Class A share. It has also partnered with Walgreens and CVS to open "SmileShops" in their drugstores.
Customers can visit a SmileShop to get their teeth scanned and create a 3D image, which SmileDirectClub then uses to create a custom aligner. You can also order a kit online and send back an impression.
Based in Nashville, Tennessee, the company plans to use the proceeds of its IPO to finance international expansion and research and development. The aligners of SmileDirectClub are currently available in the US, Canada, Australia and the UK.
-CNBCs Elijah Shama contributed to this report.