SmileDirectClub is quickly going the way of Bed Bath & Beyond
BySamuel O'Brient, InvestorPlace ReporterOct 3, 2023, 4:29 pm EDT
- SmileDirectClub (SDC) has declared bankruptcy and is about to delist.
- As of tomorrow, it will no longer be listed on the Nasdaq.
- That will likely be the final nail in the coffin for this troubled company.
Another once-prominent company has filed for bankruptcy. SmileDirectClub (NASDAQ:SDC) rose to prominence as an innovator in the teledentistry field. But over the past five days, SDC stock has struggled considerably, falling from more than $18 per share in 2019 to its current price of $0.083, declining more than 99%.
The company began this week with the news that it had filed for Chapter 11 bankruptcy. Now, it is preparing to delist from the Nasdaq tomorrow. Granted, SmileDirectClub received a delisting notice from the tech index in November 2022. But this time, it appears that the struggling company has no cards left to play. Today marks its final day trading on the Nasdaq.
What’s Happening With SDC Stock
As can be expected, news that SDC stock is about to delist has sent shares plunging as investors rush to sell. As of this writing, it is down almost 50% for the day, a severe decline, even for a bankrupt company. As InvestorPlace‘s William White reports, news of the bankruptcy sent SDC stock down 61% yesterday.
When a company declares bankruptcy, sometimes retail traders will attempt to resurrect it with meme stock momentum. But even the r/WallStreetBets crowd isn’t going near SDC stock, and for good reason. The company is facing severe problems that stem beyond bankruptcy. As the Wall Street Journal reports:
“SmileDirectClub [has been] mired in a legal conflict with its competitor and former minority investor, Align Technology, over alleged violations of noncompete and confidentiality agreements. In May, a California state court ruled that SmileDirectClub had to pay Align $63 million for violating supply agreements between the two companies. Other lawsuits from consumers and orthodontists accuse the company of false advertising, which it denies.”
Regardless of how these legal proceedings turn out, SmileDirectClub has numerous strikes against it. That could scare away even motivated buyers. And since SDC stock is about to delist from the Nasdaq, the stock has virtually no hope of a turnaround, even if meme stock investors decide to get behind it. The most likely scenario is that the company will end up pursuing liquidation, going a similar way to failed retailer Bed Bath & Beyond (OTCMKTS:BBBYQ).
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On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Article printed from InvestorPlace Media, https://investorplace.com/2023/10/sdc-stock-alert-prepare-for-smiledirectclubs-nasdaq-delisting-tomorrow/.
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