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(1) Thread on $ALGN @DarkSideOfTheSt @Butler60S @bluff_capital @jonathanrockoff @LibertyRPF @victoriouscake @LSValue @WallStCynic
(2) Those following $ALGN have prob heard about how they recently lost arbitration to SmileDirectClub (SDC), their largest competitor.
(3) What probably not many realize is how large SDC have become over the last couple of years.
(4) I've collected some data which shows dynamics of SDC business since mid-2018.
(5) SDC's business has been on fire 
(6) Between June 2018 and Mar 2019 SDC has helped 300k patients (according to their own disclosures). DM me for links if you're lazy.
(7) For comparison: during Q2-Q4 2018 $ALGN shipped 560k align cases in North America region.
(8) According to Axios, SDC expects to do at least $1B in revenue in 2019. At $2,000 per case that is 500k cases a year axios.com/smile-direct-c…
(9) In Oct 2018 SDC raised $380M from a pool of investors including those who previously invested in $ALGN. SDC plans an IPO in mid-2019.
(10) The loss of arbitration to SDC is a huge blow to $ALGN: SDC's business model is superior and $ALGN is prohibited from replicating it till Aug 2022.
(11) I believe $ALGN missed on revenue in Q3 2018 as SDC ramped up their internal 3D printing capacity and reduced purchases from $ALGN
(12) Adding a couple of points: at this moment SDC presents a threat to $ALGN only in North America ($ALGN's international segment should grow faster in the short term) AND in simple cases as SDC's technology is not as sophisticated as $ALGN's yet
(13) That said, manufacturing of aligners is not a rocket science and SDC is quickly narrowing its technological gap vs $ALGN
(14) The risk for $ALGN here is that SDC narrows this technological gap enough to put ALGN's management in front of the following choice: (1) either keep gross margins and become a niche product instead of mass product or (2) fight for market share and cut prices.
(15) BTW guys at nanalyze made a point that $ALGN is actually a 3D printing company which is classified as a healthcare company nanalyze.com/2019/02/most-f…
(16) Historically 3D printing industry has been subject to boom and bust cycles. Is this properly priced by investors of $ALGN? If you price a cyclical business as a defensive (e.g. healthcare) be prepared for disaapointment.
(17) The newly announced partnership between SDC and CVS will allow the former to massively scale its business with little cost. Another huge blow to $ALGN cnbc.com/2019/04/25/cvs…
(18) Website traffic of $ALGN and SDC. SDC leads by a wide margin
(19) SDC is growing way much faster than $ALGN (source: Google trends).
(20) Update on SmileDirectClub $SDC $ALGN
