Jordan Katzman, co-founder of SmileDirectClub Inc., left, and Alex Fenkell, co-founder of SmileDirectClub Inc., watch traders during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Thursday, Sept. 12, 2019.
Michael Nagle | Bloomberg | Getty Images
Shares of SmileDirectClub plummeted more than 13%, on Monday after California Governor Gavin Newsom signed a bill that protects consumers who use teledentistry products. Bill 1519, which he extended through January of 2024, gives the Dental Board of California oversight over all dental operations within 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.
The stock has struggled since going public just over a month ago, with shares currently down 58% from its IPO price of $23. The stock began trading on September 12.
Despite the regulatory headwinds, Wall Street remains positive on the stock. Eight major Wall Street firms initiated coverage on the stock last Monday with buy ratings and rave reviews, despite the stock’s poor debut.