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Two weeks ago, Allbirds was a cautionary tale. The maker of the wool sneakers seemingly glued to the feet of every Patagonia-vested VC in 2019, once worth $4 billion, had a humiliating fire sale on April Fools\u2019 Day and sold itself to a brand management company for $39 million\u2014roughly 1% of its peak valuation. It had already closed every full-price store in the U.S.<\/p>\n
The obituaries abounded as analysts pitied yet another darling that mistook a Silicon Valley fad for a real brand. Today, the same ticker is up more than 700% as Allbirds pivots to AI. That\u2019s not a joke.\u00a0<\/p>\n
That\u2019s because Allbirds, the shoe company, is no longer a shoe company. Taking the Silicon Valley label on the nose, on Wednesday, it announced it is pivoting entirely to artificial intelligence compute infrastructure and renaming itself NewBird AI. The new entity has lined up $50 million in funding, expected to close in the second quarter, which it plans to spend on \u201chigh-performance, low-latency AI compute hardware\u201d leased out to customers that \u201cspot markets and hyperscalers are unable to reliably service.\u201d Basically: it\u2019s buying GPUs and renting them out, and would like to be maybe named in the same sentence as Nvidia, please.<\/p>\n
The whiplash is something to behold. Just eight months ago, cofounder Tim Brown sat down with Fortune for the brand\u2019s 10-year anniversary and laid out a comeback plan rooted in the basics. \u201cThis moment is about going back to the beginning and back to those core principles that had been lost as we had so much growth and expansion,\u201d he said, quoting a Maori proverb about walking backwards into the future. \u201cThis is a brand worth fighting for, with principles that have never felt more full of potential and important in this moment.\u201d<\/p>\n
The principles, it turns out, were negotiable.<\/p>\n
CEO Joe Vernachio, brought in to save the company, was at the time pitching smaller, cozier stores with books and plants and couches and candles, and reframing the brand\u2019s eco-pitch around the word \u201cnature\u201d instead of \u201csustainability,\u201d which he joked \u201csounds like a chore, like sorting your garbage.\u201d By April, Vernachio was the one announcing the $39 million fire sale, telling shareholders the deal \u201csets up the brand to thrive in the years ahead.\u201d The brand will indeed continue, under new ownership at American Exchange Group.\u00a0<\/p>\n
The amazing surge has drawn comparisons to a time of the late 2010s, when any company could slip in the word \u201cblockchain\u201d into a new strategy and the stock would surge. Particularly, it looks a lot like Long Island Iced Tea\u2019s bizarre 2017 shift from iced tea toward the \u201cexploration of and investment in opportunities that leverage the benefits of blockchain technology.\u201d That move initially sent the stock surging, closing up more than 180%. The company was delisted only months later.<\/p>\n
#Allbirds #ditches #sneaker #business #pivot #compute #stock #surges<\/p>\n","protected":false},"excerpt":{"rendered":"
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