Shares of Allbirds jumped 373% on 15 April after the company announced that it would exit the shoe market and pivot towards artificial intelligence (AI) instead, Bloomberg reported today.
The stock more than quadrupled just days ahead of Allbirds Inc.’s rebrand to NewBird AI, which will focus on providing fully integrated GPU-as-a-Service and AI-native cloud solutions, as per the report. The struggling, San Fransisco-based firm has pulled $50 million convertible financing to facilitate the switch from shoemaker to AI compute infrastructure, it added.
The shares are up to $13 each from under $3 the previous day.
“The Company will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service,” the company said in the announcement.
Allbirds’ struggles in shoe space
Founded in 2015 by former professional soccer player Tim Brown and renewable resources expert Joey Zwillinger, Allbirds was once valued over $4 billion, as per a CNBC report. However, shares of the company have tumbled every year since their 2021 debut, with its market value closing at about $22 million on Tuesday, 14 April, the Bloomberg report added.
Prior to this, Allbirds had in March, signed a deal to sell off its footwear assets to American Exchange Group, which owns brands including Aerosoles, as per the report. It had planned to cease operations sometime this month.
Sales have slumped 50% between 2022 and 2025, down from $298 million to $152 million. In February, it had closed all of its full-priced stores in the United States, the CNBC report added.
‘Potential to improve margin’
“The move exits a structurally lower footwear and apparel model for a higher-value compute business, though execution risk remains high. The company has potential to improve its long-term margin profile if the transition is executed well,” Bloomberg Intelligence analyst Poonam Goyal wrote in a note.
It’s not the first struggling company to pivot into a buzzy new industry in the hopes of recapturing shareholder value, the report added.
In 2024, Core Scientific Inc. turned its attention away from Bitcoin mining to AI and last year a handful of biotechnology companies made the switch into digital assets to varying degrees of success.
(With inputs from Bloomberg)
