Sneaker manufacturer Allbirds decided to go AI: its shares soared by more than 400%
An American company that used to sell sneakers announced a pivot towards AI infrastructure. Its shares jumped more than fivefold in one day.
An American company that used to sell sneakers announced a pivot towards AI infrastructure. Its shares jumped more than fivefold in one day.
According to Reuters, Allbirds has closed a $50 million convertible financing deal with an institutional investor and plans to use the money to purchase graphics processors. The company also plans to change its name to NewBird AI and eventually move into providing cloud computing and artificial intelligence-related services.
The market reacted sharply. During trading, the company's shares rose by 435%, to $13.33 per share, and the market value of the business reached $116 million. The shares were also among the most active on the Fidelity platform, indicating significant interest from retail investors.
The turnaround itself seems atypical also because Allbirds has recently effectively scaled back its previous business model. The company has been closing most of its physical stores due to weak demand and a shift to online partnerships. In addition, last month it sold its brand and footwear assets to American Exchange Group for $39 million. So this is not about launching another direction alongside its core business, but about an attempt to completely change the company's profile.
At the same time, there are almost no details of the new strategy. The company announced only plans to buy GPUs and enter the market of cloud computing and AI services, but did not explain what kind of infrastructure it will build, for whom it will work and how it will compete in this market. That is why some analysts took the news skeptically. Independent retail consultant Bruce Winder said that this is more an attempt to ride the wave of interest in AI than to enter a segment where the company already has obvious expertise.
The company's background is also important in this context. After going public on Nasdaq in 2021, Allbirds was valued at about $3 billion, but by the last close it had lost about 99% of its market value. The new jump in shares does not change this fact, but shows how strongly the stock market is now reacting to even the mention of the transition to AI.
Such stories have already happened in the US market. Reuters recalls an example from 2017, when the beverage manufacturer Long Island Iced Tea Corp changed its name to Long Blockchain, trying to take advantage of the hype around blockchain. The story with Allbirds looks similar: a company from a crisis consumer segment is trying to repackage itself under the hottest technology trend of the moment.
Previously, dev.ua wrote about how Swarmer shares increased by 520% , or more than 6 times, in the first day after the placement.
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