When SmileDirectClub held its IPO, the company sold around 58.5 million shares of common stock at $23 per share. Soon after on Sept. 24 dentists filed a lawsuit against the company, alleging false advertising, fraud, negligence and unfair trade practices.
Dentists argued that SmileDirectClub is subject to litigation for allegedly operating as a dentist without proper licensing in various states.
The investors claim after this lawsuit was filed SmileDirectClub’s share price fell nearly 9 percent. Stock prices continued to fall in the following days, dropping nearly 44 percent from its IPO price.
Along with making false statements, the investors claim SmileDirectClub failed to disclose material adverse facts about the company’s business, operations and prospects.
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