Joe Vernachio, former COO of Allbirds, was appointed CEO in March 2024, replacing founder Joey Zwillinger, to turn the company around after years of declining sales and store closures. Less than five years after the sneaker maker achieved a $3 billion IPO, Vernachio is now asking shareholders for approval. agreementannounced on April 15, the sale of the company’s assets to the American Exchange Group for only $39 million. The rest will be a Nasdaq-listed shell renamed NewBird AI. A new venture building a business to rent out access to GPUs, the chips used to train and run AI systems, is backed by up to $50 million in debt from an unnamed institutional investor. Shares in Allbirds have risen similarly 435 percent after the announcement.
A day later, the media company Myseum picked up the name Myseum.AI and saw its shares jump. DatChat previously said the redesign reflects its “AI-based technology,” including AI agents and automation in its tools.
It’s a typical Wall Street pattern: when a business stops exciting investors, companies hit a hot story. During the dot-com bubble, firms that added “.com” saw average stock jumps 74 percent about the announcement, according to a 2001 Journal of Finance paper.
Blockchain has brought a more chaotic sequence. In 2017 and 2018, companies chasing compliance found it crypto. A drink maker Long Island Iced Tea almost tripled in market value after becoming Long Blockchain. Biotech company Bioptix became Riot Blockchain and increased fivefold in three months, ending 2017 up 730 percent. Kodak more than doubled after unveiling KODAKCoin. Now, the word AI
For Allbirds, the pivot comes after the transition is out of place. The company lost $77 million last year, with revenue down 20 percent. Yours 2025 annual report he warned that there are “significant doubts” about its ability to continue as a going concern without a deal.
“Vernachio was brought in to fix the product, but at some point, someone looked at the numbers and realized that even a successful product fix wouldn’t generate enough value to justify a public company,” Gad Allon, a Wharton professor who studies operations strategy and how companies scale, told the Observer.
“The bet here is not really, ‘We’re going to be an AI company,'” Allon added. “The bet is, ‘we can use this public shell and the current market interest in anything related to AI to raise money and find our way into the relationship.'”
The explosion was temporary. The day after the surgery, the Allbirds’ stock dropped 24.6 percenta reminder that an AI label can create a trade event before it creates a business.
Allbirds, co-founded by Zwillinger and former New Zealand soccer player Tim Brown, was once a direct-to-consumer success story, selling strongly branded sneakers before going public in 2021. During the AI cycle, it was lost about 99 percent of its market value. Vernachio, whose résumé includes Mountain Hardwear and The North Face, has spent the past year closing stores, cutting costs and pushing wholesale and online partnerships.
Some pivots make more sense than others
Some pivots are at least consistent with existing assets. Core Scientific, a former Bitcoin miner with data centers and electricity contracts, emerged from bankruptcy in 2024 and later became a takeover target for CoreWeave, an AI cloud computing powerhouse. Last year, a natural gas producer New Era Helium rebranded as New Era Energy & Digital and announced plans for an AI data center in Texas.
Allbirds’ jumps are difficult to connect. Its new venture leaves shareholders in an unusual position: they bought a sneaker company and are now being asked to stay invested in a business built around financing, acquiring and deploying AI infrastructure.
“The execution gap is huge,” Allon noted. “Managing a shoe supply chain and building an AI infrastructure is not the same. There is no shared talent, no shared technology, no shared customer relationships.”
Regulators are also reviewing AI claims. In 2024, SEC Chairman Gary Gensler warned that “AI wash”—exaggerating or distorting the use of AI—may violate security laws.” That year, the SEC delivered enforcement actions against two investment advisers for misleading AI statements. Those cases weren’t about public company pivots, but they underscored the dangers of making AI claims in a market eager to reward them.
For Allbirds, the question is no longer whether Vernachio can revive the sneaker brand, but whether the failed consumer company can use the AI boom to buy itself a second life.
