Shares of Allbirds surged nearly six-fold on Wednesday after the footwear maker said it was raising capital and pivoting towards AI computing infrastructure.
The San Francisco-based company said that it would execute a $50 million convertible financing agreement with an institutional investor and plans to use the proceeds to acquire graphics processing units (GPUs).
Allbirds also plans to rebrand itself as “NewBird AI” and, over time, shift focus to offering cloud computing capacity and AI services, though it did not provide additional details on its new strategy.
The overhaul comes amid robust investor enthusiasm for AI-related stocks and the data-center infrastructure that supports it, hoping to benefit from the hundreds of billions of corporate investment pouring into the technology.
“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.
Allbirds has been shutting most of its brick-and-mortar stores over the last few months owing to muted demand and switch to online partnerships.
Last month, Allbirds said it had sold its brand and footwear assets to American Exchange Group for $39 million.
The stock closed up 582% at $16.99, valuing the company at nearly $148 million.
Allbirds was also among the most active orders on Fidelity’s trading platform on Wednesday, signaling interest from retail traders.
The move echoes past efforts by small US firms that reshaped their business models to tap investor enthusiasm.
In 2017, beverage maker Long Island Iced Tea pivoted to blockchain technology under the name Long Blockchain
Allbirds made its Nasdaq debut in 2021 at a valuation of $3 billion, but shed about 99% of its market value as of its last closing price.
