SmileDirectClub
SmileDirectClub’s shares took a dive this week after California Gov. Gavin Newsom signed a law that gives his state oversight into all dentistry operations that occur there.
Now, the company’s stock is down almost 60% since it went public in September.
An orthodontist-shaped cavity
Quick minty refresher: SmileDirectClub brings orthodontia to your home, minus visits to a dentist’s office. The company says its model lets it work on customers’ pearly whites at a fraction of an orthodontist’s price. But some state regulators have expressed doubts about the safety of direct-to-consumer dentistry.
Now, California — a trendsetter in state-level consumer protection policy — says before any dental work can go down, a real, live dentist has to check out patients’ X-rays. SmileyD says the law will turn its smile upside down — and increase its cost of doing business in the Golden State.
ICYMI, it’s been a bad year for unicorns
Most big-company IPOs have seen their share prices deflate significantly after going public. One reason: Many of these businesses (Blue Apron, Peloton, Lyft) are tech disruptors.
When they were private companies, idealistic pitches and overuse of words like “synergy” could translate to billion-dollar valuations. In the real world, the comparatively skeptical public pulled those valuations down.
Now, SmileDirectClub’s Californian root canal — and the increased focus on reining in big tech — might be an indicator of the next problem these young companies will face: government regulation.