SmileDirectClub down 5% premarket on reported aligner problems

SmileDirectClub (NASDAQ:SDC) slips 5% premarket on average volume on the heels of an NBC news report that some customers have experienced problems with its dental aligners, an issue that has surfaced before.

The Better Business Bureau has received more than 1,800 complaints, mostly about customer service issues.

Last month, nine members of Congress asked the FDA and FTC to investigate the company “to ensure that it is not misleading consumers or causing patient harm.”

California enacted a law in January requiring x-rays for all teledentistry patients before beginning online aligner treatment. Virginia is considering the same.

Chief Legal Officer Susan Greenspon-Rammelt counters that the company has helped more than 750K people with its network of licensed dental professionals, adding that network dentists, not the company, are responsible for treatment plans and undesirable outcomes may occur if patients don’t follow the program correctly. She also says that the company reviews all patient scans before sending the first treatment kits and only to those it considers to be good candidates (~95% of those reviewed are accepted).

The company’s September 2019 IPO was a flop. Shares debuted at $23, then bottomed at $8.73 about a month later. The stock has clawed back ~75% since then.

Update: In a statement, the company takes issue with NBC’s “misrepresentations.” It says NBC had the opportunity to connect with customers who either had no concerns with treatment or who did and resolved their issues with their treating doctor but declined to include these customers in its report. It also says there is no investigation by the FDA or FTC into its business, adding that when customers request a refund outside of its published policy, it asks that they sign a general release that contains a confidentiality provision which is standard business practice and similar to recommendations from the American Association of Orthodontists.

https://seekingalpha.com/news/3542180-smiledirectclub-down-5-premarket-on-reported-aligner-problems