Allbirds Inc., the once-buzzy maker of wool sneakers valued at more than $4 billion in its heyday, announced a new business plan just days before it planned to close down for good: AI computing infrastructure.
And in a market that’s reacted in knee-jerk fashion to just about anything related to artificial intelligence, it did just that — sending Allbirds stock up as much as 876%.
The response underscores the intensity of the speculative mania around AI, which has fueled stampedes into would-be winners and panicked rushes away from any industry that seems poised to be undone by the competitive threat.
Allbirds, which plans to rechristen itself as NewBird AI, is not the first struggling company to try to get a another lease on life by seizing on the hot new thing.
Such name changes were legion during the dot-com bubble. Long Island Iced Tea Corp., a beverage company, renamed itself Long Blockchain Corp. during the early days of the crypto craze. Bitcoin miners are now going AI. And in February, a tiny former karaoke company’s stock soared — and triggered a fierce selloff across the logistics industry — when it trumpeted its AI tool for trucking companies.
“Developments like this are a sign that froth is in the market,” said Matt Maley, the chief market strategist at Miller Tabak + Co., who said it wasn’t surprising, given how stocks have been rallying. “But it’s still something that should give investors some pause.”
Allbirds said it secured $50 million of financing and plans to buy computer gear that will turn it into a tech company with a “long-term vision to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider.” Allbirds previously agreed to sell all of its assets and intellectual property to American Exchange Group for about $39 million.
Because the process of an initial public offering is a difficult one, failed publicly traded companies sometimes use their old stock listings to bring a new concept or company straight to the market.
“The public listing is an asset,” said University of Florida finance professor Jay Ritter. “Over the years we’ve see reverse mergers where most of them have had kind of a negative connotation given that most of the companies that have gone public via a reverse merger have been low quality companies and public-market investors haven’t done all that well.”
Despite the fact that there is no obvious overlap between shoemaking and cutting-edge computer science, Allbirds has roared higher. The company previously seized on the business zeitgeist with its eco-friendly shoes, which were once a Silicon Valley favorite. Allbirds made its stock market debut in 2021, when near-zero interest rates were pushing up speculative stocks of all stripes, only to see its shares tumble every year since.
By Tuesday, it had a market value of about $22 million.
