The Allbirds two weeks ago were a cautionary tale. By 2019, the wool sneaker maker, which seemed to have every Patagonia venture capital fund on its back, once worth $4 billion, sold itself to a brand management company in a humiliating April Fool’s sale for $39 million, about 1% of its peak valuation. The company had already closed all full-price retail stores in the United States.
Obituaries flooded in as analysts mourned yet another beloved person who mistook a Silicon Valley trend for a real brand. Today, that same ticker is up more than 700% as Allbirds pivots to AI. That’s no joke.
That’s because Allbirds, a shoe company, is no longer a shoe company. Nodding to its Silicon Valley branding, the company announced Wednesday that it will pivot entirely to artificial intelligence computing infrastructure and change its name to NewBird AI. The new entity is preparing to raise $50 million in funding, expected to close in the second quarter, and will use the funds to finance “high-performance, low-latency AI computing hardware” that it will lease to customers “that cannot be reliably served by spot markets or hyperscalers.” Basically, you’re buying and renting GPUs, so you probably want your name to be in the same sentence as Nvidia.
Whiplash injuries can be eye-opening. Just eight months ago, co-founder Tim Brown sat down with: luck On the occasion of the brand’s 10th anniversary, the company launched a revival plan rooted in the basics. “This moment is a time to go back to our roots and return to the core principles that have been lost because of so much growth and expansion,” he said, citing a Maori proverb about moving backwards into the future. “This is a brand worth fighting for, with principles that feel more possible and important than ever in this moment.”
After all, the principles were negotiable.
At the time, CEO Joe Bernacchio, who was brought in to save the company, promoted a small, cozy store lined with books, plants, couches and candles, and reframed the brand’s eco pitch around the word “natural” rather than “sustainability,” which he joked “sounds like a chore like sorting trash.” By April, Vernacchio announced a $39 million fire sale, telling shareholders that the deal “sets the brand up for growth in the coming years.” The brand will actually continue under the new ownership of American Exchange Group.
This surprising jump is drawing comparisons to the late 2010s, when any company could see its stock price skyrocket if it incorporated the word “blockchain” into its new strategy. In particular, this is similar to Long Island Iced Tea’s bizarre pivot in 2017 from iced tea to “exploring and investing in opportunities to leverage the benefits of blockchain technology.” The move initially caused the stock price to soar, reaching more than 180% at the close. The company was delisted just a few months later.
