A new California law has sent shares of SmileDirectClub down 12.9 percent on Monday (Oct. 14) and its stock is now down 60 percent since it went public a little over one month ago.
California Gov. Gavin Newsom extended Bill 1519 through January of 2024, giving the Dental Board of California authority over all dental operations in the state.
“While this bill does not preclude SmileDirectClub’s continued operations in California, it will create unnecessary hurdles and costs to Californians that need care but struggle to afford it. The undebated, clinically unsupported, and ill-advised policy changes that are included in this bill — a bill that was intended to reauthorize the Dental Board of California until last-minute policy additions were added — have created arbitrary barriers to technological innovation,” SmileDirectClub said in a statement, according to CNBC.
Despite currently being the worst-performing IPO this year among companies that went public with a valuation over $1 billion, eight major Wall Street firms actually gave the stock a buy rating and positive reviews last week.
SmileDirectClub launched as an online business, sending customers a home kit to make a teeth impression, which gets sent back to make invisible braces. Earlier this year, CVS announced it will open hundreds of SmileDirectClub centers inside of its stores, with plans to eventually have them in upward of 1,000 locations. The centers will be called SmileShops, and customers will be able to get a 3D scan of their teeth to make the braces. The drugstore ran a pilot program in six locations, which grew to 13. It was so successful that the company decided to make it bigger.
The partnership is “about how CVS is very much on the lookout for innovative solutions we can provide conveniently, locally and affordably,” CVS Vice President of Beauty Maly Bernstein said at the time. “This is one example of us making sure we’re leaders in doing that.”