The $4 Billion Tech-Shoe Collapse: How a Silicon Valley Darling Lost 99 Percent of Its Value |
The $4 Billion Tech-Shoe Collapse: How a Silicon Valley Darling Lost 99 Percent of Its Value
A one-time sensation is leaving the public markets as it’s scooped up for $39 million.
BY BRIAN CONTRERAS, STAFF WRITER @_B_CONTRERAS_
Gif: Inc.; Photos: Adobe Stock; Getty Images
Sneakerheads will pay hundreds of dollars for the right pair of kicks—but $39 million may be pushing it, even for them.
Not so for American Exchange Group, however. The portfolio company, which already owns Aerosoles, is set to pay nearly $40 million for Allbirds, the brand of comfort-forward, eco-conscious shoes that were at one point the industry’s golden child.
The privately-held American Exchange Group will buy Allbirds’ assets and intellectual property, early reports indicate, pending approval from Allbirds’ shareholders on the public markets, with the deal expected to close within the next few months. Allbirds’ remaining corporate entity will then shut down, per Reuters.
Shares of the shoe company jumped from about $3 to nearly $4 Monday evening, Google Finance data indicates, but have since lost all those gains and then some, sitting at around $2.60 as of press time. The brand’s valuation has dropped more than 23 percent over the last five days; by more than half over the past six months; and a staggering 99.5 percent over the last five years.
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The upside? American Exchange Group’s offer represents a sizable premium on Allbirds’ approximately $23 million market cap.
Times have been rough on the shoe brand. TechCrunch reports that when it first IPO’d in 2021, Allbirds raised $348 million—or nearly 10x what it’s selling for now—and briefly traded at a $4 billion valuation, more than 100x the value of American Exchange Group’s offer.
The minimalist wool sneakers were once a key component of the Silicon Valley aesthetic—just throw on a Patagonia vest to complete the look—and early investor interest reflected as much.