🧠 Takeaways:
Allbirds firesold its entire brand for $39M then 16 days later pivoted to Neocloud and the stock went +582%. Strap in for the stupidest: deal, biz and pivot of the year.
The IP sale: how a $4B brand sold for less than a Manhattan apartment.
The shell pivot: no team, no customers, no experience. AI jazz hands.
The meme stock: retail poured in $5.2M in a single day. History says this ends at $1.
+ Let’s meet in London
LBAB Community: Let’s Meet In London!
I'm going to be in London the week of May 11th (Tuesday - Thursday) for Vervaunt Pulse purely to meet people and hang out.
Reply if you’re going to be in town that week.
It’d be great to meet up while I’m over there.
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 is dead and the phoenix has risen as a ponzi scheme called NewBirds AI (I can’t make this s*** up). The shoe brand that once symbolized Silicon Valley firesold everything. And now wants to sell GPUs.
Somehow the stock went +582% in 1 session on a press release.
This is a Nasdaq shell getting repurposed before it dissolves.
Stock price: $11
Market Cap: $95M
L5 Performance: -98%
P/E Ratio: N/A
Today we’re shorting this dumpster fire into the ground.
Financial Summary
FY 2025 Financial Statements (YoY Comparison)
Rev: $152M (-19.7%, -$37M) 👎👎
Gross Profit: $63M (-22.8%, -$19M) 🤮
OPEX: $142M (+1.2%, +$2M) 🤮
Net Income: -$77M (improved from -$93M) 😟
Cash/Debt: $24M cash vs $43M debt (net -$20M) 🤮
FCF: -$55M (cash used in ops) 🤮
TLDR Analysis: A slow-motion collapse followed by a Hail Mary
Rev -49% in 3 years while On grew +31% and Hoka grew +24%.
Spent $142M running a $152M biz. 93 cents of overhead per dollar of revenue.
Net debt negative, going concern warning in the 10-K, 5 months of runway left.
They had to firesell the IP because they had nothing left to burn. This is how you ruin a $300m+ Rev/yr biz.
And instead of just letting this thing happen, we need to pretend this neocloud pivot is real. It’s honestly just embarrassing for everyone involved.
Let’s TLDR This Biz
Founded:
2015 by Tim Brown (NZ footballer) and Joey Zwillinger (biotech engineer).
One wool sneaker. Instant cult following. The unofficial shoe of Silicon Valley.
Aha Moment:
2016 - Time Magazine calls it "the world's most comfortable shoe."
Sold 1M pairs in 2 years. No marketing budget. Pure word of mouth. Real product-market fit.
Growth:
IPO Nov 2021 at $15/share. $4B+ peak valuation on day one.
Launched: 60+ stores, leggings, jackets, performance running shoes.
None of it worked. Customers wanted the wool runner. They got a lifestyle brand that couldn't grow into itself.
Model:
DTC + sustainability premium. Beautiful in 2016. Table stakes by 2022.
On and Hoka ate their lunch w/ better product and better unit economics. Allbirds had neither the scale to compete on price nor the innovation to justify the premium.
The Stall:
Rev fell from $298M (2022) to $152M (2025). -49% in 3 years.
Closed all U.S. stores. $419M in cumulative losses. Going concern warning.
Sold brand to American Exchange Group (Ed Hardy, Aerosoles) for $39M on March 30. 16 days later: GPU-as-a-Service company. Stock +582%. Welcome to 2026.
Let’s Unpack This Deal
This isn't a pivot. It's 2 separate transactions running simultaneously.
March 30: Allbirds announces sale of ALL brand IP + assets to American Exchange Group (AXNY) for $39M.
The plan: sell the brand, distribute proceeds, dissolve the public entity. Standard end-of-life playbook.
April 15 - Allbirds announces a $50M convertible financing facility from an unnamed institutional investor + Changed their name: NewBird AI that will buy GPUs, rent them to AI companies.
If this is approved investors will get $39M as a special dividend + whoever holds shares after that date owns NewBird AI
The exit hatch to cover their ass: the NewBird AI board authority to dissolve the company within 12 months if "continuing to operate the business is not viable."
There’s a lot of fishy parts to this
The unnamed institutional investor
The fact that they brought in a new banker (Chardan) not Goldman or TD Cowen (who ran their previous financings)
The 16-day gap between dissolution plan and AI pivot
The 12-month dissolution clause.
The AI narrative is marketing. And right now that narrative is the whole biz.
Let’s Untangle This Deal
Here are the 3 reasons NewBird AI is dead on arrival.
1) No one on this team knows how to build a data center
This is their leadership team’s background:
CEO Joe Vernachio: 40 years in outdoor apparel. Patagonia. Nike. North Face. Mountain Hardwear. Allbirds. His degree is an associate's in Forest Sciences. Zero tech background.
CFO Annie Mitchell: adidas North America CFO. Gymshark VP Finance. Spent her entire career in consumer retail finance. Has never worked in infrastructure, SaaS, or anything cloud-adjacent.
CTO Sanjay Joseph: the closest thing to a tech credential. Founded a tax software startup (acquired by Intuit 2013), ran TurboTax engineering, then spent 9 years building Allbirds' Shopify e-commerce stack. He knows retail web apps. He has never procured a GPU cluster or operated a data center.
Nobody on the exec team or board has run GPU procurement, negotiated data center colocation deals, or sold enterprise compute capacity.
They have literally no right to be getting into this biz.
When Crusoe pivoted to AI cloud, they hired AWS, Google Cloud, and Nvidia executives BEFORE announcing.
CoreWeave was founded by people who ran GPU mining ops.
NewBird AI has a team of 362 former sneaker employees. It’s almost embarrassing we’re even talking about this. How did the stock not get sold into the dirt on this news.
Takeaway: If it smells, looks, feels and tastes rotten. That’s because it is.
2) $50M is a raindrop in the GPU ocean
Let’s take a quick peak at the CAPEX investment of all of Newbird AI’s competitors.
CoreWeave spent $23B in capex in 2025.
Lambda Labs: $1B+.
Crusoe: invested $500M+ before meaningful scale.
The minimum viable GPU cluster to attract serious AI workloads runs $200-500M in hardware alone.
NewBird AI raised $50M. AND they distributing the $39m they gathered from the Allbirds IP sale to investors.
If they were remotely serious about this neocloud pivot they'd have kept the $39M. And raised a hell of a lot more than $50m.
But none of their existing investors would have bought this fugazi pivot otherwise.
Retail will yet again be holding the bag on this quasi con man pivot. It’s all done legally, but my lord it’s hanging on by a legal thread.
Takeaway: Comps are helpful to understand if you’re being lied to.
3) We’re officially in Meme stock Territory
Retail traders poured $5.2M into BIRD on April 15 - a single-day record for the stock per Vanda Research, beating even the 2021 IPO day.
Stock went from $2.49 → $16.99.
Peaked at $24.31.
Market cap went from $21M → $159M on a press release.
Then: -36% the next day.
Even the MEME ETF bought in (per Bloomberg).
It’s sitting ~$11 while I’m writing this.
I’m sorry to the idiots who poured in $5m+ into this because I can’t imagine they know enough about business or how to invest to understand what they’re doing, but they deserve to lose all their money here.
It would have been more financially responsible to bet it all on black.
The pattern is identical every time:
tiny market cap + hot narrative + retail FOMO = violent spike then violent reversal,
The 12-month dissolution clause says it all. We should expect this thing to go nowhere (You can’t even get on NVIDIA’s customer list in 12 months let alone sell cloud compute to customers)
Takeaway: Every meme pivot round-trips. The only variable is time to crash.
Final Thought
A company that couldn't sell shoes, 1 of the most successful consumer categories on earth. Where every peer On, Hoka, New Balance was growing at insane clips now want to convince you that they can sell data centers.
They have $50m on a convertible note to enter a market where serious players spend $23B a year on capex. Led by a CEO w/ an associate's degree in forest sciences and 40 years selling fleece jackets.
Just by throwing AI in the name and saying their going to clone a shitting business model sends their stock up 8x in a week is how you know we’re in a bubble. And a later stage.
You might not remember when
Long Island Iced Tea did this w/ blockchain in 2017.
Last year Algorhythm did the same thing pivoting w/ AI logistics.
RadioShack did it w/ crypto.
None of them built anything. All of them round-tripped to be worth nothing.
This is what bubbles look like.
