Allbirds stock price jumped nearly 600% on Wednesday after the footwear maker announced to raise capital and reinvent itself as an AI computing infrastructure company.
Allbirds plans to rebrand itself as “NewBird AI” and shift focus to offering cloud computing capacity and AI services.
On Wednesday, Allbirds share price opened 174% higher at $6.82 apiece as against its previous close of $2.49 level on the Nasdaq Stock Exchange. The stock skyrocketed as much as 876% to a fresh 52-week high of $24.31 during the session.
Allbirds share price ended higher by $14.50, or 582.33%, at $16.99 apiece on the , valuing the company at $147.95 million. By Tuesday, it had a market capitalisation of about $22 million. The rally in Allbirds stock price was supported by heavy volumes of around 288.16 million shares.
Pivot to AI Infrastructure
The San Francisco-based company said it had signed a definitive agreement with an unnamed institutional investor for $50 million in financing to shift its business to AI infrastructure.
The company plans to use the proceeds to purchase graphics processing units (GPUs). The transaction is expected to close during the second quarter of this year.
“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said in the release. “NewBird AI is being built to help close that gap.”
According to a Reuters report, 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.
Allbirds was listed on Nasdaq in 2021 at a valuation of $3 billion. However, the company has lost about 99% of its market value as of its last closing price.
(With inputs from Agenceis)