What’s All is New.<\/p>\n
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Allbirds, once the go-to shoemaker<\/a> for finance and tech bros coast to coast, is transforming into NewBird AI, and its stock is seeing a wild rally on the pivot.<\/p>\n Shares exploded higher by as much as 876% to $24.31 after closing at $2.49 on Tuesday.<\/p>\n The sneaker company announced<\/a> it entered into an agreement with an institutional investor for a $50 million convertible financing facility, which it will use to buy “high-performance GPU assets” as part of a pivot into AI computing infrastructure.<\/p>\n Allbirds announced<\/a> a deal at the end of March to sell its shoe business for $39 million<\/a> to American Exchange Group, which owns brands<\/a> like Aerosoles, Ed Hardy, and Mudd. William Blair analysts said the offer represented a $5.70 per-share value when it was announced.<\/p>\n The new company cited a “long-term vision to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider.”<\/p>\n The company joins a list of firms stretching back to the early 2000s internet boom that have pivoted to initiatives far outside their core business in a bid to win back investors.<\/p>\n In 2017, the Long Island Iced Tea announced a pivot<\/a> to become Long Blockchain Corp. The stock surged almost 500% on the news. The company was delisted<\/a> in 2021 and the SEC charged<\/a> three people connected to the company with insider trading.<\/p>\n More recently, media company BuzzFeed pivoted to AI in 2023, sparking a huge stock rally. Shares are down nearly 95% from their 2023 peak, and reports earlier this year said the company is teetering at the edge of bankruptcy<\/a>. <\/p>\n Allbirds’ statement framed the pivot as the company stepping up to meet a growing gap in the supply of critical AI computing power.<\/p>\n “The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the announcement read.<\/p>\n “NewBird AI is being built to help close that gap. 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.”<\/p>\n