REUTERS: Shares of SmileDirectClub , a teeth alignment company, tumbled 10.7per cent in their market debut on Thursday, after the company's initial public offering was priced above expectations.
Shares opened at US$20.55, giving it a market capitalization of US$7.96 billion, if underwriters exercise their option. The company's shares rose as high as 2.7per cent from the opening price to US$21.10, in early trading.
SmileDirectClub had priced its initial public offering at US$23 per share on Wednesday, above its initial target range of US$19-US$22, raising about US$1.3 billion at a valuation of about US$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://bit.ly/2mePGsZ)
The online dentistry startup reported total revenue of US$423.2 million for the year 2018, a surge of about 190per cent 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 US$74.8 million last year, from US$32.8 million in 2017. While it posted a loss of US$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 and Lyft Inc , whose stocks have struggled since going public.
J.P. Morgan and Citigroup 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 .
WeWork is widely expected to have a disappointing debut that may value its shares at US$15 billion, less than a third of its peak valuation of US$47 billion.
(Reporting by Abhishek Manikandan in Bengaluru; Editing by Shailesh Kuber)