Japan Deep Value
Japanese Equity Research, Deep Value & Below-Book Opportunities
Allbirds' rebrand as an AI infrastructure provider is an empty pivot repeating the Long Blockchain playbook. It is selling its shoe business for $39 million to become NewBird AI, a GPU-as-a-service provider with zero experience in chips, data centers or cloud, zero customers and zero GPUs, funded by a $50 million convertible pending shareholder approval. The stock still jumped 582% in a day. Long Island Iced Tea's 2017 blockchain rename ended in delisting and insider-trading charges. x.comÂ
Allbirds' pivot from shoes to AI data centers as Newbird AI looks like a repeat of Long Island Iced Tea becoming Long Blockchain, which was delisted within a year. The shoe company plans to convert its assets to acquire high-performance GPUs, and the stock surged as much as 600% on the announcement. x.com x.comÂ
Allbirds' pivot from selling shoes to selling GPUs puts it in a market where compute is so scarce that even fashion companies are joining Bitcoin miners in abandoning their old businesses. Selling shoes is essentially dead, and the stock jumped more than 150% on the pivot. x.com x.com x.comÂ
NewBird AI, formerly Allbirds, lacks the expertise and capital to compete in GPU leasing despite a real AI compute shortage. It sold its entire footwear brand for $39M, less than the $50M of convertible debt it immediately raised to buy GPUs. That $50M will not go far in a capex-heavy business against AWS, Azure, CoreWeave and purpose-built players. Tight GPU supply supports the idea on paper, but a real problem does not mean this company can solve it, after a 650% one-day jump. x.comÂ
Allbirds renaming itself Bird AI is a crappy shoe company in desperation mode, not a sign of an AI bubble. AI is going nowhere, with winners like Nebius and the hyperscalers and losers who imitate them, and Bird AI looks set to be one of the losers. The jump is a pop and fizzle, and very risky. x.com x.comÂ
Allbirds looks set to grind higher as it runs out of shares to borrow, with the borrow rate up to 330%. Shorts are being sucked in while algos try to take control of the float, and little new borrow is expected to come online, so the move should continue for the next few days. x.com x.comÂ
Allbirds' pivot from footwear to AI infrastructure looks like a loss-making machine that will dilute shareholders again and again, so its jump should fade faster than most expect. Per @amitisinvesting, Allbirds is selling all its assets and raising $50 million in convertibles to buy GPUs. Retail buyers are serving as exit liquidity. x.com x.com x.com x.comÂ
Allbirds' plan to sell its footwear brand, rename itself NewBird AI and use a $50 million convertible facility to buy GPUs for AI compute is a sign of a bubble near its peak, making it the short of the year. x.com x.com x.comÂ
Allbirds' AI pivot is absurd. It is selling its footwear business, renaming itself NewBird AI and using a $50 million convertible facility to buy GPUs, yet the stock jumped 300%; $50 million buys fewer than 20 B200-class racks, an order Nvidia might ignore. US microcaps worth tens or hundreds of millions are like altcoins, mostly operator-driven, with the shell itself as the main value and charts drawn to lure retail. Best avoided. x.comÂ
Allbirds is not worth buying after tripling, since the price now means paying $2.50 for every $1 of assets; the rally belongs to momentum and day traders. x.comÂ