(Reuters) - Shares of SmileDirectClub (O:SDC), a teeth alignment company, tumbled 10.7% in their market debut on Thursday, after the company's initial public offering was priced above expectations.
Shares opened at $20.55, giving it a market capitalization of $7.96 billion, if underwriters exercise their option. The company's shares rose as high as 2.7% from the opening price to $21.10, in early trading.
SmileDirectClub had priced its initial public offering at $23 per share on Wednesday, above its initial target range of $19-$22, raising about $1.3 billion at a valuation of about $8.9 billion.
The Nashville, Tennessee-based company said it intends to use the proceeds toward redeeming LLC units from its pre-IPO investors and fund a dividend to them and also pay bonuses and funding-related tax obligations. (https://
The online dentistry startup reported total revenue of $423.2 million for the year 2018, a surge of about 190% from 2017. For the first six months of 2019, SmileDirectClub posted total revenue of 373.5 million.
SmileDirectClub's losses have also more than doubled to $74.8 million last year, from $32.8 million in 2017. While it posted a loss of $52.9 million for the first six months of 2019.
The offering of SmileDirectClub, which sells teeth aligners to customers, comes on the heels of market debuts of loss-making companies such as Uber Technologies (N:UBER) and Lyft Inc (O:LYFT), whose stocks have struggled since going public.
J.P. Morgan and Citigroup (NYSE:C) served as lead underwriters to the IPO.
Another IPO hopeful, WeWork owner The We Company, is looking to go public, despite opposition from its largest investor SoftBank Group (T:9984).
WeWork is widely expected to have a disappointing debut that may value its shares at $15 billion, less than a third of its peak valuation of $47 billion.