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SmileDirectClub’s Descent Continues

The fascinating case of SmileDirectClub and its hard-to-nail-down-valuation continued this morning, with the recently-public direct-to-consumer teeth-straightening startup losing another 1.4 percent of its value as of the time of writing.

The heavily-backed unicorn is worth $3.68 billion today, a fraction of its IPO valuation set in earlier this year when the firm was worth $23 per share and valued at $8.9 billion.

For example, if SmileDirectClub was worth $3.2 billion as a private company in October of 2018, it was probably not worth $8.9 billion a year later when it went public.

But since the IPO, the stock market has bid down the company’s valuation so sharply that it could be argued that the company is fairly valued now, and was therefore overvalued a year ago during its final private round.

This is at least partially how the private markets have gotten some companies very wrong this year (Uber, Lyft, SmileDirectClub, Peloton, etc.).

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