Shares of Allbirds (NASDAQ: BIRD), formerly a fashion sneaker company known as Allbirds, are experiencing extreme price swings. The company recently sold its footwear brand and assets to American Exchange Group for $39.00 million. This move marks a complete departure from its original business as it steps into a new industry.
Following the sale, the company announced a major strategic pivot into artificial intelligence. It is rebranding as "NewBird AI" and will now focus on providing AI infrastructure. This new direction shifts the company's entire business model from consumer footwear to technology services for other businesses.
To fund this transition, Allbirds secured $50.00 million in convertible financing, as highlighted by Barrons. This type of funding is a loan that can be converted into company stock in the future. The capital will be used to buy powerful graphics processing units (GPUs) for its new venture.
The company plans to offer a "GPU-as-a-Service" business. This means it will rent out its computing power to customers who need it for demanding AI tasks. In the long term, NewBird AI also aims to develop its own AI-powered cloud solutions for the market.
The announcement caused Allbirds' stock to surge dramatically, rising as much as 800% at its intraday high. As noted by Fox Business, the price jumped from a close of about $2.50 to a peak near $22.00 per share. However, the stock remains highly volatile, dropping 36% in the next session.
