Ending Allbirds + 2xing Our $

🧠 The Takeaways

Allbirds won’t make it to June 2026. We’re unwinding this biz and doubling our money. 

1. Immediately cease all operations.

2. Liquidate the inventory.

3. Take as much sitting cash out of the biz as possible.

+ The 3 Charts I’m looking at right now.

LBAB! Community - Where is the economy?

Instead of getting wrapped up in the media headlines + catastrophizing, there are 3 charts I monitor to see where we’re at.

Let’s focus on the data (in the US).

1) The 10yr Treasury Yield

In English: The interest rate the US government needs to pay if they want to sell 10 yr bonds. The US will need to sell somewhere in the ballpark of $8T worth of bonds this year. 

For context, every 0.5% drop in the interest rate (e.g., 4.5% -> 4%) saves America ~$38B in interest rate payments/year.

This is the governing principle + goal of the current Trump policy (Tariffs, DOGE etc).

At the beginning of 2025, the interest rate spiked to 4.8%, but fell in April to 4%. 

The problem: Post-“Liberation Day,” they popped back up to 4.3%. All policies from here will need to get that number back down as much and quickly as possible.

2) Consumer Confidence Index

This is what concerns me the most. 

Consumer confidence has fallen off a cliff in 2025. And this is one of those self-fulfilling prophecies more than a good prediction engine. 

Just like Inflation.

We may not actually be in a bad economic environment, but if people stop spending money because they hear how bad everything is, they will stop spending. 

Which will actually cause a bad economic environment.

The problem: It’s all momentum. 

If consumer panic actually causes a stop in spending, then we are in for a world of hurt. I’m hoping to see some sort of flatline or bounce back soon where we keep spending and this is all noise.

3) Credit Card Delinquency

We have the least amount of data on this, but to me, this is the “Oh s**t” data set. 

If people stop paying their credit cards, it’s very likely that car/home/bigger payments are coming next.

At least for now, this is trending in the right direction. Despite a big lift from the lowest-ever registered level post-COVID, we’re still at a level lower than any recorded period, and it’s trending down, which is a good sign.

My only callout/concern: This is typically a lagging, not leading, indicator. Delinquencies have spiked 1–3 quarters into previous recessions. So, this isn’t so much that the storm is coming, but the tsunami has hit the shores.

With some many variables constantly moving, I don’t think we’ve seen anything that clearly indicates we’re heading in 1 direction or the other. I’d expect more violent swings as everyone tries to react to new policy evolutions.

Bottom line: Right now, the best leading indicator I’m watching is the 10 yr treasury curve. If interest rates go up, that means we’re getting new trade policies. Down means we’re getting more of the same.

Let’s Examine This Biz

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here.

Allbirds, the sustainable sockless footwear brand, is dead. We’re watching the death of a unicorn play out in the public markets, and it’s brutal. Allbirds won’t make it to 2027.

• Share price: $4.98

• Market Cap: $30m

• L5 Performance: -99%

• P/E Ratio: Lol. (Allbirds loses ~$100m/yr.)

Financial Summary

TLDR Analysis: The Death of a Unicorn

• Sales plummeted -25% after falling 13% the year before. 🤮

• OPEX at 94% of REV. 🚨🤮

• -$93m Net Income  and $60m cash on hand ⚰️

This is textbook “How not to run a biz.” 

Also a great public insight into what a brand implosion looks like. 

This is why investors never want to see contracting sales for a public market biz. Because the ruthless adjustments you need to make when sales fall are so painful, few are willing to do it.

At what point does terrible strategic decision-making become a lack of fiduciary responsibility?

Let’s Strip This Biz

Here is my 3-step plan to strip this biz + still make $80m on it.

1) Immediately cease operations.

When you’re losing $93m/yr and have $60m in the bank.

They’ll object and say they have a $50m credit line they haven’t used, but you can’t violently lose money and be in debt.

In 1–2 quarters, they’d default on their covenants (rules their debt provider has about the biz) and be bankrupt anyway.

This iteration of Allbirds is dead. 

The fact that they still spend 70% of their Rev on SG&A is appalling. 

They are spending more on SG&A today @ $189m in Rev then they did when they IPO’d in 2021 @ $277m topline.

Every single cost that isn’t selling the remaining inventory (I’m talking about Marketing as well) is getting turned off. At 43% Gross margins, this biz can’t afford to convince people to buy their products.

Allbirds Operations stops day 1. 

We can’t afford to spend more than $5m on continued operations.

Takeaway: OPEX shouldn’t be higher than 20% of Rev.

2) Liquidate the $44m of Inventory

The beauty of a public biz is we know the value of their inventory and what it should be sold for. 

We’ll probably have to take a haircut on the value, but we need to recoup as many dollars sitting in the current inventory as possible.

I’m not talking about selling it at Retail MSRP. I’m talking about dumping it for as close to the amount of money it cost to purchase.

Goal: scrape every dollar back.

The brutal reality of a physical product biz is that inventory investment doesn’t stop at COGS. You also need to consider the Sales and Marketing cost to move a unit. 

Spending $0.92 of every dollar in Rev on Marketing + SG&A isn’t a biz. It’s a charity without the tax benefits.

A team of 2 can liquidate that inventory in 3 months.

Takeaway: Know what your inventory is worth. Don’t get stuck in money pits.

3) Pocket the $60m in cash on hand

Honestly, the greatest value Allbirds has is that their stock is trading for a lower value than their cash.

That is where the return will be.

Any time you hit what I call the “Equity Inversion” (Market cap <<< cash on hand), investors have declared the biz worthless and heading for bankruptcy court.

It would be a violent period, but we could wind down this biz in <6 months and net somewhere around $40–50m in cash.

The alternative:

• Burn through the cash in 9 months

• Shut the biz down anyway

• Declare bankruptcy to get out of store leases + manufacturing contracts

My version avoids lighting the pile of money on fire.

Takeaway: When you cross into negative equity conversion, you have to ask if it’s worth it to keep going.

Final Thought

I know this newsletter was more aggressive than usual and seems harsh.

But something that gets missed in conversations around these types of acquisitions is what a successful death looks like.

We so often idolize the building + team taking the game-saving shot risk at the end that we end up overlooking the real point of the biz—even in its death. 

To maximize shareholder value.

1 place where I disagree with all the anti-PE arguments about the sacking and looting of great brands is that some brands are going to die anyway. 

We can argue whether the PE-style of selling everything quickly to make returns is a good thing or not. But why not accelerate a biz’s death instead of a long, slow, painful death that sucks up all the cash the biz will make over that time frame. 

When something truly doesn’t have enough potential value to justify the continued investment, I think there is the case to come in and get as much value for the asset as possible.

Because if the only offers come from people who want to break it up, not build it up, the market has spoken on where the biz is in its lifecycle.