October 02, 2023

Monday ✅.

Today's newsletter is 698 words, a 2.5-minute read.

🔔 The dashboard: The S&P 500 closed up, but nearly flat.

  • Biggest gainer? Discover Financial Services (+4.8%), after disclosing a consent agreement with the FDIC, agreeing to improve consumer compliance.
  • Biggest decliner? NextEra Energy (-9.0%), as investor concerns about high interest rates on the clean energy sector drove the stock to a 52-week low.

1 big thing: Not a cause to smile

Illustration: Maura Losch/Axios

The feverish competition among teeth straightening services has one of the industry's biggest players struggling to survive, Nathan writes.

Why it matters: SmileDirectClub filed for Chapter 11 bankruptcy protection on Friday, having failed to profitably corner the promising but highly competitive world of removable, clear-plastic teeth aligners.

The big picture: The bankruptcy filing casts a pall over the company's strategy of selling its braces alternative directly to consumers.

  • After launching in 2014, SDC quickly took off as an affordable alternative to rival Align Technology's Invisalign, which is more expensive and typically requires office visits and physical brackets.
  • SDC allowed customers to avoid office visits while having their cases remotely directed.

What they're saying: "I think the direct-to-consumer model, as far as orthodontics goes, has come and gone as a real legitimate way to move teeth," Jefferies analyst Brandon Couillard, who tracks the teeth alignment industry, tells Axios.

  • "It just proved to be not the right way to go."

State of play: SDC says it'll cut debt and use a new injection of at least $20 million from its founders with a goal of stabilizing its business and emerging as a sustainable enterprise.

  • But liquidation is a real possibility if the company can't achieve a going-concern transaction in the next two months, CFO Troy Crawford said in a court filing.

The bottom line: SDC's 1,800 employees — and the 1,150+ orthodontists and dentists it partners with — are hanging in the balance while the future of the company is decided.

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2. Charted: Indirect effects

Estimated losses during the first two weeks of the UAW strike
Data: Anderson Economic Group; Chart: Axios Visuals

The UAW strike targets the traditional Detroit Three automakers, but suppliers are feeling the pain, too, Nathan writes.

  • Workers are now on strike at 43 facilities for GM, Ford and Stellantis. As a result, the automakers are buying far fewer parts — from seats to door handles.

By the numbers: Auto industry suppliers lost about $1.3 billion in the first two weeks of the strike, according to Anderson Economic Group estimates released Monday.

  • That tops the estimated $1.1 billion lost by the automakers themselves.

Threat level: The publicly traded suppliers with the most exposure to the UAW — in order, as a percentage of their revenue — are American Axle, Magna International and Lear, according to Barclays estimates.

3. What's happening

🚗 Tesla missed market expectations for Q3 sales. (Reuters)

🏈 Former CNN boss Jeff Zucker is investing in Front Office Sports. (Axios)

4. Birkenstock targets $9.2B IPO valuation

Photo: Krisztian Bocsi/Bloomberg via Getty Images

Are sandals good for roadshows?

Driving the news: Birkenstock will soon find out, this morning filing to sell 32.26 million shares at between $44 and $49 in its IPO.

  • At the top of its range, the German footwear company would raise $1.58 billion at around a $9.2 billion valuation, Axios' Dan Primack writes.

The intrigue: Birkenstock's listing was nearly a casualty of the government shutdown. In the end, of course, there was no shutdown, so it's academic.

Yes, but: Other companies seeking to go public this year are looking at Congress' 45-day continuing resolution, which has a Nov. 17 deadline

  • For prospective December issuers — and there are several — that means either accelerating the process or preparing for the very real possibility of delay.

5. Ring the alarm

Beyoncé performs onstage during the Renaissance World Tour in Kansas City, Mo., on Sunday. Photo: Kevin Mazur/WireImage for Parkwood

Queen Bey is coming to a theater near you, Nathan writes.

What's happening: AMC Entertainment announced today that Beyoncé's new concert film, "Renaissance: A Film," will hit North American theaters Dec. 1.

The intrigue: Both superstars negotiated distribution deals directly with AMC, bypassing the traditional studio system.

  • Instead, AMC is serving as the distributor of the films, meaning they will also be available in non-AMC theaters.

Details: Tickets to see the movie version of the Renaissance World Tour will be $22 plus tax for standard showtimes, plus more for premium viewings like IMAX.

💭 Nathan's thought bubble: If it isn't clear by now, Taylor and Beyoncé run the world.

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6. What they're saying

"A lot of people wanted there to be a Sam."
— Author Michael Lewis, speaking about the aftermath of crypto exchange FTX's collapse, and with it Sam Bankman-Fried's promise of effective altruism.

The criminal fraud trial of "SBF" kicks off tomorrow in New York. Follow it with our Axios Crypto newsletter.

Today's newsletter was edited by Pete Gannon and copy edited by Carlos Cunha.

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