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Post by laupailee on Dec 22, 2019 13:13:46 GMT -5
I've been seeing the commercials for SmileDirectClub (SDC) and their clear teeth alignment system on TV frequently this past week.
(At first I confused them with Invisilign (ALGN), which has been a very peppy stock.) The ads are clear-cut and to the point, show teeth easily straightened by wearing nightime aligners. Ads also indicate ease to obtain treatment, with SDC shops being built everywhere, and cheap, too.
Now, this is interesting.
My wife had Invisilign (ALGN) tooth alignment maybe fifteen or twenty years ago. They did a fantastic job but it was indeed expensive. And mandatorily overseen by a dentist. All of which contributed to the expense.
Now, here comes upstart SDC. They are rolling out stores where they can do the three-D imaging, have their own manufacturing capability so their margins are fat and they send out the trays of aligners directly to the user.
SmileDirectClub went public in September and promptly got hammered ever since. The IPO placed at $23 per share is right now is down to $8.50.
Here's a blurb from a Yahoo story:
"SmileDirectClub (SDC) is a direct-to-consumer teledentistry company that lets you order orthodontic teeth straighteners online. Its big pitch is that for a one-time payment of $1,895, you can get your teeth straightened regardless of how crooked they are. But the company has been hit with legal setbacks as states including California and Georgia pass laws that require that a licensed dentist be on hand anytime 3D images are taken of a patient’s mouth. That would put a significant dent in SmileDirectClub’s bottom line. The company listed its IPO in September at $23 a share."
The panic is over the legal exposure and also a little bit of disappointment over management's recent guidance. I am wondering if this is a great entry point and am seeing some analysts say they think the shorts are about done, and that there might be a nice ramp-up from here as the company's growth seems inevitable over a just-starting international platform. The company's prospects look highlyinteresting, legal issues aside.
ANY THOUGHTS?
LPL
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Post by Deleted on Dec 22, 2019 13:24:57 GMT -5
I am only familiar with the price of the stock. Saw the IPO and ensuing trade, never gave it a second thought.
You looking for a trade or considering buying it as an investment?
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Post by Deleted on Dec 22, 2019 13:59:10 GMT -5
at $8....don't know that I'd trust 'em. If I could (for $hI&s and giggles) pick it up at $7.75 which has been a thin level of support, any bounce back to 8-8.50 I'd take gain on the trade and out the door I'd go. So, for me, I'd have to commit too much capital to it for that small of a move to be worth it and if I got caught in the trade, I would not be committed enough to continuing buying in order to buy my way out, so I'd lose on the trade once the $7.75 level broke. I would not view it as an investment until they cleared things up and found support for the stock. If there is a 6 month lock up, that has yet to pass, and with the stock in an apparent death spiral, it could be like rats abandoning ship. It isn't an area I see a ton of growth for, but that's just my take. I'd only view it as a trade. Much bigger fish in that sea....so they could get snapped up by a Henry Schein (HSIC) I suppose....OR....somebody like HSIC could come run them out of business. Too hard to determine the outcome, so my thought? Pass. news.bloomberglaw.com/securities-law/smiledirectclub-directors-hid-risk-to-get-rich-in-flop-ipo-suitSmileDirectClub Directors Hid Risk to Get Rich in IPO: Suit (1) Nov. 25, 2019, 2:47 PM; Updated: Nov. 25, 2019, 5:40 PM COURT: Del. Ch. TRACK DOCKET: No. 2019-0940 (Bloomberg Law Subscription) COMPANY INFO: SmileDirectClub Inc. (Bloomberg Law Subscription) SmileDirectClub Inc.’s directors were hit with a Delaware lawsuit claiming they got rich selling stock at above-market prices during its initial public offering, even as shares crashed to 40% of their opening value on news the company concealed state enforcement actions. The web-based teeth-straightening pioneer went public at $23 a share in September through an “up-C” IPO, which involves transforming an existing limited liability company into a subsidiary of a newly formed corporation. After the company issued 59 million shares, its price plunged 25% the first day, nearly 50% within two weeks, and eventually down to $9 a share, according to the Nov. 22 complaint. The shareholder derivative complaint was filed in the Delaware Chancery Court by an individual investor who previously led an unrelated securities suit against Twitter Inc. Raiding Storefronts Six of the company’s board members sold $625 million worth of stock at $21.85 to a mid-level holding company they controlled, when the shares were already worth significantly less, the lawsuit says. Those insiders were allegedly aware that SmileDirectClub faced major regulatory hurdles in California, where the state dental board has repeatedly raided its storefronts as part of an ongoing probe accusing the company of illegally practicing dentistry. SmileDirectClub, which is facing similar investigations in multiple states, sued California last month. The case opened the latest front in a wave of suits challenging the regulatory authority of state licensing boards under 2015’s N.C. State Board of Dental Examiners v. FTC, in which the U.S. Supreme Court limited their immunity against antitrust claims. The board kept investors in the dark, despite knowing that the widening controversy, especially in its California chapter, posed a major threat to the company, according to the complaint. That move inflated its offering price, to the detriment of public investors, the suit says. Some of the allegations echo the claims from several federal securities suits filed after the IPO contesting the adequacy of the company’s regulatory disclosures. The Delaware suit is partly based on those cases, according to the complaint. Cause of Action: Breach of fiduciary duty; unjust enrichment; indemnification. Relief: An accounting, damages, costs, and fees. Response: SmileDirectClub does not comment on pending litigation. Attorneys: The plaintiff, the Doris Shenwick Trust, is represented by Rosenthal, Monhait & Goddess PA and Abraham Fruchter & Twersky LLP. The case is Doris Shenwick Trust v. Katzman, Del. Ch., No. 2019-0940, 11/22/19. To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com |
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Post by laupailee on Dec 23, 2019 9:44:37 GMT -5
Well, FF, thanks for that.
"Practicing dentistry without a license" -- that's not a pretty picture.
And the insider sales of shares just below the IPO price really gives off a bad odor, considering their knowledge of regulatory mess arising.
Too bad, too, because if the legal issues didn't loom, this might be an excellent longterm opportunity. The chance to enter and ride a twenty-bagger. Like buying Netflix before they were streaming ...
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Post by Deleted on Dec 24, 2019 7:06:19 GMT -5
You never know brother. Goes back to there being a world of difference between a good stock and a good company! Maybe it recovers, maybe it doesn't....I have no knowledge of the business or the company, my opinion is based on armchair google news and purely on the price action of the stock. My personal take? When a company's share price gets smashed in the public markets, and it's in that death spiral, sometimes buying "on the way back up" is a safer strategy! I tell people that sometimes and it sounds dumb, but once you've "walked a mile in a stock investors shoes" you understand. The general question I always get when I relay that feeling is: "wait, the stock is at 8 but you say you would feel better buying it at 12 on the way up?". Yep, that's exactly what I'm saying!!  Remember Bernard Baruch!! You can have the first 20% and the last 20%, I'll be perfectly happy with all thats in between. |
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Post by laupailee on Jan 9, 2020 7:50:00 GMT -5
Stock loved their announcement of a special SDC deal with Walmart.
I didn't buy this and feel safer not holding possible ticking bomb, with regulators possibly torpedoing their business model.
But still, we all have one of these, a stock we talk ourselves out of ... that doesn't cooperate with our fears, and instead climbs and climbs!
LPL
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Post by Deleted on Jan 9, 2020 17:32:58 GMT -5
Stock loved their announcement of a special SDC deal with Walmart. I didn't buy this and feel safer not holding possible ticking bomb, with regulators possibly torpedoing their business model. But still, we all have one of these, a stock we talk ourselves out of ... that doesn't cooperate with our fears, and instead climbs and climbs! LPL I thought about you. Posted in the other thread. Both Nokia (which he had just mentioned) and SmileDirect (which you mentioned) had good news Monday morning. NOK was put on some "super duper buy list" and SDC did the WMT deal.
You and ryash were in the drivers seat. BOTH would have been great trades, because as I posted in the other thread, I would have been LOOOOOONG gone on BOTH of them....but, that's just me. Neither really in my wheelhouse so they would have been strictly trades for me.
As I said, I see what I feel is a much higher ramp on an inevitable path in other areas, so I'm pretty concentrated/focused on the task at hand.
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Post by CardsFan on Jan 10, 2020 5:38:23 GMT -5
I thought about you. Posted in the other thread. Both Nokia (which he had just mentioned) and SmileDirect (which you mentioned) had good news Monday morning. NOK was put on some "super duper buy list" and SDC did the WMT deal.
You and ryash were in the drivers seat. BOTH would have been great trades, because as I posted in the other thread, I would have been LOOOOOONG gone on BOTH of them....but, that's just me. Neither really in my wheelhouse so they would have been strictly trades for me.
As I said, I see what I feel is a much higher ramp on an inevitable path in other areas, so I'm pretty concentrated/focused on the task at hand.
I'm not worried about missing out on Nokia. It's still on my tracking list. I'm just muddling through more 5G research to figure out if I really want in. As a former Telecom guy, I'm extra cautious with these names. 5G revenue isn't going to start significantly moving any needles until 2021 so we have time on all those names. At least until this summer. My priority right now is biotech. There are a few names I'm tracking with promising data. Stocks I want have doubled in the last year, but I'm not worried because I usually don't invest until Phase 3 trials get closer to ending. If I'm going to buy those names, I'll have to make a decision in the next few weeks before P3 data is released. Nokia is a little like Roku and Guardant Health. If they come down to my buy points I'll pull the trigger. Until then, I'm going to selectively lock in some gains until Super Tuesday is done. There is no reason to rush a bunch of money into the market until we know who the dem candidate is going to be. |
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Post by Deleted on Jan 10, 2020 6:22:34 GMT -5
I thought about you. Posted in the other thread. Both Nokia (which he had just mentioned) and SmileDirect (which you mentioned) had good news Monday morning. NOK was put on some "super duper buy list" and SDC did the WMT deal.
You and ryash were in the drivers seat. BOTH would have been great trades, because as I posted in the other thread, I would have been LOOOOOONG gone on BOTH of them....but, that's just me. Neither really in my wheelhouse so they would have been strictly trades for me.
As I said, I see what I feel is a much higher ramp on an inevitable path in other areas, so I'm pretty concentrated/focused on the task at hand.
I'm not worried about missing out on Nokia. It's still on my tracking list. I'm just muddling through more 5G research to figure out if I really want in. As a former Telecom guy, I'm extra cautious with these names. 5G revenue isn't going to start significantly moving any needles until 2021 so we have time on all those names. At least until this summer. My priority right now is biotech. There are a few names I'm tracking with promising data. Stocks I want have doubled in the last year, but I'm not worried because I usually don't invest until Phase 3 trials get closer to ending. If I'm going to buy those names, I'll have to make a decision in the next few weeks before P3 data is released. Nokia is a little like Roku and Guardant Health. If they come down to my buy points I'll pull the trigger. Until then, I'm going to selectively lock in some gains until Super Tuesday is done. There is no reason to rush a bunch of money into the market until we know who the dem candidate is going to be. Sounds like a great discipline. My strategy shifted last month. Will be pretty narrow minded/focused for 2020. Plan on circling back around to med tech, 5G/Edge, big data, etc....at some point on down the road. |
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Post by laupailee on Jan 10, 2020 7:28:25 GMT -5
I'm not worried about missing out on Nokia. It's still on my tracking list. I'm just muddling through more 5G research to figure out if I really want in. As a former Telecom guy, I'm extra cautious with these names. 5G revenue isn't going to start significantly moving any needles until 2021 so we have time on all those names. At least until this summer. My priority right now is biotech. There are a few names I'm tracking with promising data. Stocks I want have doubled in the last year, but I'm not worried because I usually don't invest until Phase 3 trials get closer to ending. If I'm going to buy those names, I'll have to make a decision in the next few weeks before P3 data is released. Nokia is a little like Roku and Guardant Health. If they come down to my buy points I'll pull the trigger. Until then, I'm going to selectively lock in some gains until Super Tuesday is done. There is no reason to rush a bunch of money into the market until we know who the dem candidate is going to be. Sounds like a great discipline. My strategy shifted last month. Will be pretty narrow minded/focused for 2020. Plan on circling back around to med tech, 5G/Edge, big data, etc....at some point on down the road. Ryashlee, re the Dem candidate, one person it will NOT be is Biden. Just saw announcement that Harper Collins is releasing a new tell-all on 21 Jan which, according to the breathless blurb, details millions of dollars of corrupt payoffs received by not one, not two, but FIVE of the Biden family. Holy cannoli! But I think upcoming drumbeat re Ukraine and Hunter will already be enough to do Joe in. Giuliani about to tell a lot of stories. The focus of all the Biden/graft discussion so far has missed the boat, but this is about to be corrected. Overseas, especially in Asia, when a potential partner or influencer is trying to bribe somebody, and if that somebody is giving off signals that he is unreachable for graft, the first go-to move is to try and give value to a close family member: his wife, a son, etc. All that money funneled to Hunter was as good as put into Joe Biden's pocket, he knew his son was benefitting and could not help but feel beholden to the Burisma giver, and this fact will be made much clearer as the election season moves on. So this, along with Biden's apparent senility (don't mean to be perjorative -- but his age is definitely limiting his capability now) his corrupt practices will do him in as a viable candidate. My guess is that the Dem candidate won't be known until the convention, which will be open. It will not be anyone now on the ticket because, with all of the so far left, they are unelectable by the American public, which is far more centrist. I am still convinced -- yes, you'll think this is silly -- that they will either go with Hillary again, or else the dark horse Michelle Obama. Either of them are centrist enough that they could provide a viable candidate against DT. And Michelle Obama COULD win. Hillary, no. Michelle has repeated said she has no interest in being president. No, she is not into fame and power and history. Right. LPL |
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Post by Deleted on Jan 10, 2020 7:43:52 GMT -5
Sounds like a great discipline. My strategy shifted last month. Will be pretty narrow minded/focused for 2020. Plan on circling back around to med tech, 5G/Edge, big data, etc....at some point on down the road. that they will either go with Hillary again, or else the dark horse Michelle Obama. Either of them are centrist enough that they could provide a viable candidate against DT. And Michelle Obama COULD win. Hillary, no. Michelle has repeated said she has no interest in being president. No, she is not into fame and power and history. Right. LPL I think Super Tuesday, after Mike Bloomberg unleashes a nuclear money bomb on ads will see him and that hypocrite Tom Steyer move up in the pecking order. Which is hilarious. Two Billionaires hijacking the nomination after all the billionaire bashing. I suppose they could dust off Hillary, but I can't see why they'd do that. It would basically be a slap in the face of ALL previous DT voters. Kind of like daring them to reelect him. I think rolling Hillary out and having her prance out in a pants suit waiving and grinning would cause DT's base to burn brightly. It's going to be interesting. Dem's know Bernie/Liz have no chance. Biden, if what you say transpires, is about to take a shelling....so.....once again, I'll defer to the POTUS saying of: we'll see what happens. Still feel on election night, it'll be over early. DT wins in a very lopsided victory....the guy has done everything he said he'd do. Everybody in the fly over states know it. LA and NY can yammer to each other all they want. American's know things are pretty damn good right now. |
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Post by laupailee on Jan 14, 2020 12:18:39 GMT -5
Well, FF, thanks for that. "Practicing dentistry without a license" -- that's not a pretty picture. And the insider sales of shares just below the IPO price really gives off a bad odor, considering their knowledge of regulatory mess arising. Too bad, too, because if the legal issues didn't loom, this might be an excellent longterm opportunity. The chance to enter and ride a twenty-bagger. Like buying Netflix before they were streaming ... Well, it happens to all of us. My over-conservatism cost me the first very quick 30% of the upside on Smile Direct Club. I spotted this very recently and wanted to buy, but talked myself out of it. This usually is a behavior that serves me well. The biggest impediment I saw was the potential out there for states to block the SDC business model by requiring they MUST use dentist offices to access the market. If a dentist was required every time a tooth visioning process was going on, rather than in the SDC shops by their own technicians, a lot of the profit potential is dissipated. So what happened? A New Jersey judge has ruled in favor of SDC, that such a constraint would be unconstitutional. And, further feeding the animal spirits, SDC has announced a deal with dentists, too, moving in on Invisilign's territory. The stock leapt 15% today, on top of good gains made since I first pondered this one just a short while ago, at 8.5 With the first 30% of the upside missed, this has moved away from my "investment" territory into more of a "trade". Just picked up a load of $12.50 July 17 calls at $2.50 each, a nice big chunk. If SDC can move toward the $15s by midyear, it'll be golden. An out-and-out speculation, of course, but will be a lot of fun. I always say it isn't hard to see what a company's stock should be valued at, in a rational market. But it is much more difficult to know WHEN the market will come around to sharing such a view. It's not so much the IF as the WHEN, and that's the challenge of naked option trading. On the other hand, I am always happy to take the other side of that deal, and sell covered calls on my core holdings ... LPL . |
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Post by laupailee on Jan 16, 2020 9:27:13 GMT -5
For those not yet on this, SDC looks to be off on a significant run from the recent good news. My gut feel is that it keeps running from here past at least 15, and fast. Am happy I bought a *$%&load of just-out-of-the-money calls earlier this week. As FF would say, a nice trading opportunity. (Wish I'd had the nerve to execute my original idea, and jump into this earlier, but we can't always be prescient. And now, the major consideration that had been holding me back has been removed.)
LPL
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Post by halmorris on Apr 15, 2020 17:25:28 GMT -5
Down 0.08 Today to $4.19
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