It’s perhaps the most head-turning rebrand since the Eric Watson-backed Long Island Ice Tea became Long Island Blockchain, says Herald NOW Business host Garth Bray. 

After years of losses selling sustainable shoes, Allbirds - co-founded by ex-All White captain Tim Brown - said on April 1 that it had sold its assets to American Exchange Group. 

Shareholders would vote on dissolving the company on April 24, with a positive vote leading to a payout from the US$39 million ($66m) sale - a comedown from its 2021 peak valuation of US$4.1 billion. 

But today, in a surprise development, shareholders are now being asked to vote on a radical turnaround plan. 

Allbirds says it has an agreement to raise US$50m from an unnamed institutional investor and should receive the funds in the second quarter. 

The money would be used to “pivot its business to AI compute infrastructure, with a long-term vision to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider”. 

As part of the pivot, the company would be renamed NewBird AI. 

While the plan is subject to shareholder approval, as Bray noted the dramatic pivot has been met with immediate investor enthusiasm, with Allbirds’ long beaten-down shares surging more than 700% on the Nasdaq today. 

Watson has had a long-running legal battle with the US Securities and Exchange Commission over his drinks firm’s 2021 bandwagon jump to crypto, centred on claims of insider trading. 

Bray said, “To be crystal clear, I’m not suggesting anything dodgy with Allbirds’ long-term vision to become a GPU-as-a-service provider in a complex and cash-hungry sector, but it would be one heck of a comeback story”. 

Green aims abandoned 

An SEC filing says the reborn company will seek to buy and monetise GPUs. Nvidia dominates the tight market in GPU chips, which are at the heart of training and running AI software in giant data centres, which cost billions to build. 

As power and water-hogs, data centres are not on any environmentalist’s list of favourite things. 

Accordingly, shareholders are also being asked to ditch its green credentials as it becomes NewBird AI. 

“Because the anticipated Electronics Infrastructure Business would be less focused on the public benefit of environmental conservation, which is stated in the company’s Certificate of Incorporation, stockholders are being asked to approve the Charter Amendment Proposal (as defined herein) to remove references to the company being operated for the environmental conservation public benefit,” the SEC filing says. 

‘Flipping the bird’ 

“The announcement was enough to establish Allbirds as a meme stock. The shares are up 774% at US$21.76, to give the soon-to-be shell a market cap of slightly more than US$184.5m,” the Financial Times’ “Alphaville” column said this morning in a piece called “Flipping the bird”. 

“We’d suggest running away as quickly as possible, if anyone can suggest a suitable brand of footwear for the task,” the FT’s columnist added. 

Tim Brown, who earlier resigned as co-chief executive but still serves as a director, has been asked for comment. 

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.