SmileDirectClub Inc (NASDAQ:SDC) stock starts the week plummeting around 60% after Friday’s filing for voluntary chapter 11 bankruptcy protection, as the online subscription dental products firm seeks a recapitalization.
The loss-making maker of silicon teeth aligners and teeth whitening kits traded down to 17 cents per share.
It marks the latest disappointment for investors which saw the stock float in a $23.00 per share IPO that raised $1.3 billion and valued the business at nearly $9 billion.
SmileDirectClub founders have agreed to recapitalize the company, putting in $20 million of rescue funds to ‘bolster the balance sheet’, and ‘to protect its near- and long-term financial health’.
A further $60 million may be made available to the company, conditionally.
The company will now also undergo a restructuring process.
“We are taking this step today to help ensure we are well positioned to build upon the success of our SmileMaker Platform and CarePlus offering and to continue our mission of providing safe, convenient, and effective oral care to our customers,”chief executive David Katzman said in a statement.
“This transaction is designed to ensure our future financial structure reflects the talent of our team members and the quality of our business, and I am excited about the future ahead.”
In New York, SmileDirect Club stock was down 24 cents or 58.8% changing hands at 17 cents each.