Allbirds Sells for $39M After $300M+ IPO
▼ Summary
– Allbirds has agreed to sell its assets and intellectual property to American Exchange Group for $39 million.
– The sale price is a fraction of its past $4 billion valuation and the $348 million raised in its 2021 IPO.
– The deal requires shareholder approval and is expected to close in the second quarter of this year.
– The company’s stock price jumped 36% on the news, as the sale represented a premium over its recent market value.
– Allbirds’ decline followed an aggressive post-IPO expansion into new products and retail that alienated its core customers.
The once high-flying footwear brand Allbirds has reached a definitive agreement to sell its entire business and intellectual property for a total of $39 million. This figure stands in stark contrast to the company’s former heights, representing just a fraction of the more than $4 billion valuation it briefly achieved and roughly one-tenth of the $348 million it raised during its 2021 initial public offering. The buyer is the brand management firm American Exchange Group, which also owns Aerosoles and Jonathan Adler.
Pending shareholder approval, the transaction is anticipated to close during the second quarter of this year. Proceeds from the sale are then expected to be distributed to stockholders in the third quarter. News of the deal prompted a significant market reaction, with shares surging 36% in after-hours trading. The stock had closed the prior day at $2.98, giving Allbirds a market capitalization of approximately $24.5 million. This context means the $39 million purchase price actually offered a premium over the company’s recent trading value.
The path to this point has been a public and precipitous decline for the 11-year-old company, which first gained fame for its comfortable wool sneakers. Following its IPO, Allbirds pursued an aggressive expansion strategy. The company rapidly opened physical retail stores and ventured into new product categories like leggings, jackets, and performance running shoes. These moves ultimately failed to resonate with its core customer base. The financial consequences were severe, with mounting losses eroding the company’s foundation. Co-founder Tim Brown later acknowledged the misstep, stating that the breakneck growth had cost the brand “some of our DNA.”
(Source: TechCrunch)
