"We're Shutting Down the Business"... Why a Failing Company’s Stock Soared 582%

Allbirds Stock Soars After Announcing Strategic Shift
"An Example of a Struggling Company Making a Bizarre Turnaround"

Allbirds, once beloved as the "sneakers of Silicon Valley," has announced it will exit the sneaker business and transition into artificial intelligence (AI). On the day the company unveiled this new business plan, its stock price soared by an astonishing 582%.

According to international media outlets such as The Guardian on the 15th (local time), Allbirds revealed its new business direction and announced it would change its brand name to "Newbird AI." Following the news, Allbirds' intraday stock price skyrocketed by 582%.

Once beloved as the "sneakers of Silicon Valley," Allbirds shoes. Allbirds website

Founded in 2015 under the slogan "the most comfortable sneakers," Allbirds is a footwear brand that exclusively used New Zealand wool to produce its shoes, resulting in a reputation for exceptional comfort. Notable figures known to wear Allbirds included former U.S. President Barack Obama and Hollywood star Leonardo DiCaprio. Allbirds became especially popular among Silicon Valley tech entrepreneurs, earning the nickname "sneakers of Silicon Valley."

Allbirds went public on the U.S. Nasdaq in 2021, raising $348 million (about 510 billion won) and reaching a market capitalization of $4 billion (about 5.9 trillion won). However, the company’s performance has steadily deteriorated since then. From its IPO until last year, Allbirds never recorded an operating profit, and its accumulated net loss swelled to $419 million (about 617.8 billion won). To make matters worse, sneaker sales plummeted, forcing the closure of its last offline store.

The company’s stock price also plunged by 99% from its peak, and earlier this year, Allbirds announced plans to sell the company to the brand management firm American Exchange Company (AEC).

However, the recent global boom in AI investment appears to have given Allbirds a lifeline. In its latest business strategy announcement, Allbirds stated it would focus on securing graphics processing units (GPUs) and providing computer infrastructure for AI companies.

This means Allbirds plans to launch a so-called "GPU-as-a-Service" business, renting out GPU data centers used for AI training to tech companies. In a statement, Allbirds said, "The rise in AI development and adoption has generated unprecedented demand for high-performance computing," and added, "Newbird AI aims to help bridge this gap."

The Guardian described the surge in Allbirds’ stock as "an example of a struggling company making a rapid and unusual reversal," but also noted that "it remains uncertain how feasible Allbirds’ new plan will be in the long term."

During its time as a sneaker brand, Allbirds focused on environmentally friendly business practices, such as 100% sustainable production methods. However, Newbird has reportedly stated it will place less emphasis on environmental protection and other public interests going forward.

This content was produced with the assistance of AI translation services.