Joe Vernachio, Allbirds’ former COO, was appointed CEO in March 2024, replacing co-founder Joey Zwillinger, to turn around the company after years of declining sales and store closures. Less than five years after the sneaker maker‘s $3 billion IPO, Vernachio is now asking shareholders to approve a deal, announced April 15, to sell the company’s assets to American Exchange Group for just $39 million. What remains would be a Nasdaq-listed shell renamed NewBird AI. The new plan is to build a business renting access to GPUs, the chips used to train and run A.I. systems, backed by up to $50 million in debt from an unnamed institutional investor. Allbirds shares surged as much as 435 percent after the announcement.
A day later, the social media company Myseum adopted the name Myseum.AI and saw its shares jump. Formerly DatChat, it said the rebrand reflected its “core A.I.-based technology,” including A.I. agents and automation in its tools.
It’s a familiar Wall Street pattern: when a business stops exciting investors, companies reach for a hotter story. During the dot-com bubble, firms that added “.com” saw an average stock jump of 74 percent around the announcement, according to a 2001 Journal of Finance paper.
Blockchain brought a more chaotic sequel. In 2017 and 2018, companies chasing relevance found it in crypto. Beverage maker Long Island Iced Tea nearly tripled in market value after becoming Long Blockchain. Biotech company Bioptix became Riot Blockchain and surged more than fivefold in three months, ending 2017 up over 730 percent. Kodak more than doubled after unveiling KODAKCoin. Now, the word is A.I.
For Allbirds, the pivot comes after the turnaround ran out of room. The company lost $77 million last year, with revenue down 20 percent. Its 2025 annual report warned there was “substantial doubt” about its ability to continue as a going concern without a deal.
“Vernachio was brought in to fix the brand, but at some point, someone looked at the numbers and realized that even a successful brand fix wouldn’t generate enough value to justify the public company overhead,” Gad Allon, a Wharton professor who studies operations strategy and how companies scale, told Observer.
“The bet here isn’t really, ‘we’re going to become an A.I. company,’” Allon added. “The bet is, ‘we can use this public shell and the current market appetite for anything A.I.-related to raise capital and acquire our way into relevance.’”
The burst was short-lived. A day after the surge, Allbirds stock fell 24.6 percent, a reminder that an A.I. label can create a trading event before it creates a business.
Allbirds, co-founded by Zwillinger and former New Zealand professional soccer player Tim Brown, was once a direct-to-consumer success story, selling sustainability-branded wool sneakers before going public in 2021. By the time of the A.I. pivot, it had lost about 99 percent of its market value. Vernachio, whose résumé includes Mountain Hardwear and The North Face, spent the past year closing stores, cutting costs and pushing wholesale and online partnerships.
Some pivots make more sense than others
Some pivots at least rhyme with existing assets. Core Scientific, a former Bitcoin miner with data centers and power contracts, emerged from bankruptcy in 2024 and later became a takeover target for CoreWeave, an A.I. cloud company seeking computing capacity. Last year, natural gas producer New Era Helium rebranded as New Era Energy & Digital and announced plans for an A.I. data center campus in Texas.
Allbirds’ leap is harder to connect. Its new business leaves shareholders in an unusual position: they bought a sneaker company and are now being asked to stay invested in a business built on financing, acquiring and operating A.I. infrastructure.
“The execution gap is enormous,” Allon noted. “Running a footwear supply chain and building A.I. infrastructure have nothing in common. No shared talent, no shared technology, no shared customer relationships.”
Regulators are also scrutinizing A.I. claims. In 2024, then SEC Chair Gary Gensler warned that “A.I. washing”—exaggerating or misrepresenting A.I. use—may violate securities laws. That year, the SEC brought enforcement actions against two investment advisers over allegedly misleading A.I. statements. Those cases weren’t about public-company pivots, but they underscore the risks of making A.I. claims in a market eager to reward them.
For Allbirds, the question is no longer whether Vernachio can revive a sneaker brand, but whether a collapsed consumer company can use the A.I. boom to buy itself a second life.
