Allbirds Inc. shares more than quadrupled after the former shoemaker, just days away from ceasing operations, said it would pivot its business to AI compute infrastructure.
The struggling company executed a $50 million convertible financing facility to fund the switch as it targets becoming a fully integrated GPU-as-a-Service and AI-native cloud solutions provider. The company also plans to change its name to “NewBird AI.” The San Fransisco-based company had already inked a deal to sell off its footwear assets in March.
“The move exits a structurally lower footwear and apparel model for a higher-value compute business, though execution risk remains high,” Bloomberg Intelligence analyst Poonam Goyal wrote in a note. The company has potential to “improve its long-term margin profile if the transition is executed well.”
It’s not the first struggling company to pivot into a buzzy new industry in the hopes of recapturing shareholder value. 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.
Allbirds is selling its footwear assets to American Exchange Group, whose brand portfolio includes Aerosoles, and had planned to cease operations sometime in April.
Shares have tumbled every year since their 2021 debut, with its market value closing at about $22 million on Tuesday.
