Allbirds announced a major strategic shift that sent its share price climbing more than five-fold on Wednesday. The San Francisco-based footwear company said it has reached a $50 million convertible financing agreement with an institutional investor and intends to use those proceeds to purchase graphics processing units (GPUs).
The company also disclosed plans to adopt the name "NewBird AI" and, over time, to reorient its activities toward offering cloud computing capacity and AI services. The firm did not supply further details on how the new strategy will be executed or the timeline for the transition.
"It looks like an attempt to capitalize 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.
Investors bidding up the stock reflected broad market enthusiasm for AI-related equities and the data-centre infrastructure that supports them, as companies and investors chase exposure to technology expected to absorb large corporate investment flows.
The footwear company has been reducing its physical retail footprint in recent months, shutting most of its brick-and-mortar stores amid muted demand and a shift toward online partnerships. Last month, Allbirds said it sold its brand and footwear assets to American Exchange Group for $39 million.
Market data showed the stock was last up 435% at $13.33, putting the company's valuation at $116 million, based on LSEG data. Activity on retail platforms also spiked: Allbirds was among the most active orders on Fidelity’s trading platform on Wednesday, indicating heightened interest from retail traders.
The company's announced pivot follows a pattern seen when smaller U.S. firms reshape their business models to capture investor excitement in new technology sectors. In 2017, beverage maker Long Island Iced Tea Corp pivoted to blockchain technology under the name Long Blockchain.
Allbirds made its Nasdaq debut in 2021 at a valuation of $3 billion, but has since lost roughly 99% of that market value as of its last closing price.
Is BIRD a bargain right now? One way for investors to assess valuation is to use a multi-model fair value approach. A commonly referenced method applies a mix of 17 industry valuation models to estimate a stock's range of fair values.