Bubble watch: Fashion brand Allbirds pivots hard to become AI services company
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I literally paused for a moment to look at the calendar to make sure it wasn't April 1st when I saw this headline. Gimme a break, it's early here!
Zero investors in the world would look at this move and think, "Oh, now I'll give them some money;"
Zero investors in the world would look at this move and think, "Oh, now I'll give them some money;"
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So they spent some time (ostensibly) saving the environment, why not spend some time destroying it for a change? What an incredibly DRASTIC change from making clothes to... selling LLM AI timeshares.
This is BARELY related, but it makes it even stranger to me to see a complete reinvention like this while tobacco companies seem to insist that they can't stay in business unless they're poisoning everyone's lungs. They went from cigarettes to vaping, when they literally could have done ANYTHING else.
This is BARELY related, but it makes it even stranger to me to see a complete reinvention like this while tobacco companies seem to insist that they can't stay in business unless they're poisoning everyone's lungs. They went from cigarettes to vaping, when they literally could have done ANYTHING else.
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I think I'm good going out on a limb and saying "Any company that announces a hard pivot to an unrelated product/field is doomed."
It's one thing for your R&D to come up with some new thing that is related to work you're doing on existing things and you lean in on that, but this full 100% switch? Nah, doom soon follows.
It's one thing for your R&D to come up with some new thing that is related to work you're doing on existing things and you lean in on that, but this full 100% switch? Nah, doom soon follows.
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Seems like another sign that the generative AI hype wave is reaching its high water mark, if this level of nonsense is kicking in. Now the AI beast is looking for the real suckers, with most of the regular suckers already bled dry.
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Yeah, this is a sign that we've reached or are nearing the peak. This happened with the NFT/Crypto bubble and it wasn't long after companies who barely used computers in their operations were branding themselves as crypto that the hype evaporated
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That's the beauty of it, they weren't spending all that time saving the environment, they were using it to probe the environment's weaknesses, to learn where it is most vulnerable; and now it's time to exploit those findings.
Or, yeah, it's a dead sock puppet of a company run by a group of morons collectively known as a techbro. One or the other.
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thank you mr orland. i'd write more, but i have to get to cleaning up my keyboard and monitor before the coffee dries.
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They should have aimed higher, seen farther into the future. They should have announced they were pivoting to be the first in the resurgent buggy whip manufacturing industry, since we'll all be using horse drawn carts here soon when there's no more gasoline. 
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I've never heard of Allbirds before, and it looks like I don't need to know anything more about them now.
Granted the 'brand' has new owners, so maybe I will hear something about their clothes/shoes in the future.
Granted the 'brand' has new owners, so maybe I will hear something about their clothes/shoes in the future.
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So they got a $50M financial instrument. How many GPUs can you actually buy with that? There's estimates that it's about $50B to spin up 1GW of AI datacenter. So I guess they could buy about 1MW of compute? Isn't that like a single rack? ETA: Yes, Nvidia Feynman will be 1MW per rack.
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So they're announcing that they've decided to burn the rest of their capital on slop-peddling rather than doing the decent thing and closing shop.
Gross.
Gross.
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IIRC, the dot-com bust in the early 2000's had much the same kind of bullshit toward the end. All these little startups somehow throwing their hat into rings that were, well, clearly already on fire at the time. They should have brought marshmallows, instead.
I don't see this ending well for them. The headlines have become bipolar, with the companies extolling their virtues and ignoring reality, while reality is obviously clearing its throat so it can be heard above the hype. After all, when multibillion dollar "deals" are announced with fanfare and champagne and then walked back weeks later, that's the corporate equivalent of whiplash. It's neither a good look for any of the parties, nor does it instill confidence on the part of the investors.
AI has existed in a reality distortion field for at least three years, ever since they realized they couldn't make enough money at it to pay to keep the lights on. All those "businessmen" trained in how businesses work denying the reality that AI does not scale like a business, doing all the things to scale it and only increasing their costs by doing that.
But I expect AI will die this year. Not necessarily based on its own actions, but from the economic upheavals that are coming from other quarters. I expect it could rival the great depression of 1929. Even if it's not that bad, it'll be an economic environment in which AI can't survive.
I don't see this ending well for them. The headlines have become bipolar, with the companies extolling their virtues and ignoring reality, while reality is obviously clearing its throat so it can be heard above the hype. After all, when multibillion dollar "deals" are announced with fanfare and champagne and then walked back weeks later, that's the corporate equivalent of whiplash. It's neither a good look for any of the parties, nor does it instill confidence on the part of the investors.
AI has existed in a reality distortion field for at least three years, ever since they realized they couldn't make enough money at it to pay to keep the lights on. All those "businessmen" trained in how businesses work denying the reality that AI does not scale like a business, doing all the things to scale it and only increasing their costs by doing that.
But I expect AI will die this year. Not necessarily based on its own actions, but from the economic upheavals that are coming from other quarters. I expect it could rival the great depression of 1929. Even if it's not that bad, it'll be an economic environment in which AI can't survive.
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Quite odd. The "asset sale" seems to have included basically the entire company; the announced plan at that time was for the company to "wind down" once the transaction was completed.
One wonders why they didn't simply sell the company. Was there some weird preferred-stock structure that would have made a normal acquisition too difficult?
Now it seems the owners have a new plan, to take the existing shell of a company and use it to invest in AI-related stuff. This is roughly equivalent to turning their empty company into a SPAC.
To which I say, "eh, why not?" I'd be a bit cautious about what liabilities might be left over after the "asset sale", but I'm not the target investor: I wouldn't trust some former shoe-company owner to start investing in AI, either.
One wonders why they didn't simply sell the company. Was there some weird preferred-stock structure that would have made a normal acquisition too difficult?
Now it seems the owners have a new plan, to take the existing shell of a company and use it to invest in AI-related stuff. This is roughly equivalent to turning their empty company into a SPAC.
To which I say, "eh, why not?" I'd be a bit cautious about what liabilities might be left over after the "asset sale", but I'm not the target investor: I wouldn't trust some former shoe-company owner to start investing in AI, either.
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You seem to be underestimating the stupidity of investors. Just look at the recent bitcoin treasury craze.
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This announcement has the exact vibe of that long moment after you cut yourself grievously and before the blood starts squirting everywhere.
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Given the 400% stock price jump mentioned in the article (it's ok, I'm not always completely sharp first thing in the morning either), it would seem that you are overestimating the level of common sense in at least some investors.
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The old company is gone, new investors bought the stock ticker instead of doing a SPAC and will do capital raises with the skin suit.
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Meanwhile the stock for the Avis Budget car rental company is up nearly 300% in the last month. We love our meme based economy don't we folks?
Sandisk is also up a stupid amount but you can at least identify why it's shot up, there's absolutely no way the fundamentals on the car rental industry have shifted this much in the last 30 days.
Sandisk is also up a stupid amount but you can at least identify why it's shot up, there's absolutely no way the fundamentals on the car rental industry have shifted this much in the last 30 days.
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In fairness to the tobacco companies, they've built a huge infrastructure around processing the tobacco plant. They had real reason to turn to vaping vs any more generic business. What would have been more noble would be a pivot to tobacco based fibers for clothing for example. Turn the tobacco plant into something that (hopefully) wouldn't kill people. The fact that they couldn't even do that is what really sends them to hell.
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Every day, investors prove the truism "The market can stay irrational longer than you can remain solvent".
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No, no no no no no, no no, no, no, not at all. They're announcing that they have somehow raised a whole bunch more capital from some incredible bunch of suckers to burn on this.
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Yup. Just like crypto a few years back. Long Island Iced Tea Corp., anybody?
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Up over 600% as of a few minutes ago.
The amazing thing is that if you check the stock ticker, you won't see any price change AT ALL resulting from the March 30 announcement of the "asset sale". Though there was a hundred-fold increase in trading volume.
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I'm not an economist nor a financial expert, however, after observing gamestop and tesla stocks take some of the most irrational rides and then seen the market tank when it should be stable and rise when it should be tanking..
..just gives me the sense that something is catastrophically broken deep within the machine and its only a matter of time before something is going to trigger the need for that core mechanism or cog or structural member and the instant that happens, there will be chaos.
..just gives me the sense that something is catastrophically broken deep within the machine and its only a matter of time before something is going to trigger the need for that core mechanism or cog or structural member and the instant that happens, there will be chaos.
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Because all liabilities would come along with that normal acquisition. Whether those liabilities are potential (in terms of possible future lawsuits) or actually existing (contracts with vendors, leases, employment contracts, etc) they are real money and the acquirer can just wash their hands of them
Plus, buying a public company is a pain in the ass in terms of paperwork and approvals. By leaving the husk of the public company behind, the acquiring company alleviates themselves of a bunch of SEC compliance headaches, and the sellers have a perfect vessel for their next attempt at market manipulation and/or bank fraud
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On Crypto, if not for the massive infusion of capital that came with COVID, with everyone being stuck indoors and so many other sectors being essentially shutdown, the bubble that it was bound to have burst soon enough, probably in or around late 2020 to some time in 2021.
The times we are in now parallel that, parallel just prior to the 2008 Great Recession, parallel the 1929 Wall Street Crash.
The times we are in now parallel that, parallel just prior to the 2008 Great Recession, parallel the 1929 Wall Street Crash.
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Allbirds sold off all of their assets to make the pivot. In order for a tobacco company to make a similar pivot, they would have to find a buyer for all of their tobacco assets.
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I couldn't make any sense of the headline (or the sub-headline) so I clicked it and read the article.
Although I have now read it, I feel slightly more informed but sadder than before.
Although I have now read it, I feel slightly more informed but sadder than before.
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You forgot the stock bump that Hooters got when it announced that it was moving its loyalty card to the blockchain. Wall Street is stupid when it comes to tech, and you can't fix stupid.
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All Birds was about to go bust, all its done since its IPO is burn cash (every year) and essentially lose alli its IPO proceeds. The stupidy of the day trading posse has meant a $50m loan to the company (over 2x its market cap yesterday) has generated $120m in additional market capitalisation. This is essentially a SPAC, someone is using its status as a listed company to luanch another company without going through an IPO and due diligence process. Unfortunatley I would think at least 95% of current employees will get fired. All signs of a crazy, forthy market.
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