Allbirds shares jump over 500% on plans to pivot to AI from sneakers
The Allbirds flagship store's sign is seen in Manhattan, New York City, on Sep 7, 2021. (File photo: Reuters/Shannon Stapleton)
Shares of Allbirds surged more than six-fold on Wednesday (Apr 15) after the footwear maker said it was raising capital and pivoting towards artificial intelligence computing infrastructure.
The San Francisco-based company said that it would execute a US$50 million convertible financing agreement with an institutional investor and plans to use the proceeds to acquire graphics processing units, or GPUs.
Allbirds also plans to rebrand itself as "NewBird AI" and, over time, shift focus to offering cloud computing capacity and AI services, though it did not provide additional details on its new strategy.
The overhaul comes amid robust investor enthusiasm for AI-related stocks and the data-centre infrastructure that supports it, hoping to benefit from the hundreds of billions of corporate investment pouring into the technology.
"It looks like an attempt to capitalise on the AI movement. I don't see how Allbirds brings anything to the table beyond name recognition," said Bruce Winder, an independent retail consultant.
Allbirds has been shutting most of its brick-and-mortar stores over the last few months owing to muted demand and a switch to online partnerships. Last month, Allbirds said it had sold its brand and footwear assets to American Exchange Group for US$39 million.
The stock closed up 582 per cent at US$16.99, valuing the company at about US$148 million. Allbirds was also among the most active orders on Fidelity's trading platform on Wednesday, signalling interest from retail traders.
The move echoes past efforts by small United States firms that reshaped their business models to tap investor enthusiasm. In 2017, beverage maker Long Island Iced Tea pivoted to blockchain technology under the name Long Blockchain
Allbirds made its Nasdaq debut in 2021 at a valuation of US$3 billion, but shed about 99 per cent of its market value as of its last closing price.
