What happened

Shares of SmileDirectClub (NASDAQ:SDC) headed lower Thursday, adding to the stock's woes after a busted IPO earlier this month. This time, the culprit seemed to be the struggles of fellow debutante Peloton Interactive (NASDAQ:PTON), which stumbled in its first trading day. As a result, SmileDirectClub finished the day down 10.8%, while Peloton gave up 11.2%.

So what

Thursday marked the sixth session in a row that the maker of invisible teeth aligners fell as investors are quickly losing faith in the recent IPO. SmileDirectClub shares opened relatively flat, but began to fall sharply around 11 a.m. along with other recent IPOs as negativity began to build about Peloton, which began trading around noon. Shares of SmileDirectClub continued to slide over the rest of the session.

A young man putting a dental aligner into his mouth.

Image source: Getty Images.

SmileDirect has entered the public market during a hostile time for IPOs. The We Company's attempt to go public has collapsed in the face of scrutiny, and its CEO was forced to resign earlier this week. Meanwhile, valuations on high-flying growth stocks in cloud computing companies and similar sectors have been sliced this month as investors appear to be moving their money into value stocks and other lower-risk investments. 

That's a problem for SmileDirect, which fits the profile of a typical growth stock: Its revenue more than doubled through the first half of the year to $373.5 million but it also lost $68.2 million during that period. 

Now what 

Ultimately, whether SmileDirectClub succeeds or fails will be determined by its own performance and not investor sentiment around IPOs. But investor pressure could cause management to focus on turning a profit sooner than it may have planned as the market is starting to get impatient with unproven, money-losing companies. 

With shares already down about 44% from their IPO price of $23 two weeks ago, the stock's volatility is only likely to continue as it searches for equilibrium.