With Allbirds AI pivot, a familiar strategy takes flight

Back in the 1990s, companies could slap a ".com" on their names and watch their stocks fly — it's happening now, this time with AI and a stock with the ticker BIRD.

Why it matters: It's a sign of a frothy stock market: Small companies and investors are trying to cash in on the rise of AI and the exuberance of meme traders.

Where it stands: The stock price of the former hipster/techie sneaker company Allbirds closed at $10.91 on Thursday, up more than 300% since announcing it was getting into the AI business.

• Myseum, a self-described "privacy-first social media and technology innovator," announced Wednesday afternoon that it was changing its name to Myseum.AI — its stock, valued at just a few dollars, also got a bump.

Catch up quick: Don't worry, you can still buy those wool Allbirds sneakers that used to be a thing.

• The company, once valued at $4 billion, sold off all its assets — the sneakers, the brand name — in March for $39 million. The website is still there.

Between the lines: Typically, in that kind of situation, the remaining public company shell would delist and return whatever value was left to stockholders.

• Allbirds is trying something else.

Zoom in: Now calling itself NewBird AI, the company says it expects to receive $50 million in financing from an unnamed investor that it will use to buy GPU compute capacity — and presumably sell that to other companies.

• That is pennies in the AI infrastructure business where the barrier to entry starts in the billions of dollars. "A drop in the bucket," as William Blair analysts noted.

By the numbers: Still, investors were into it!

• On Wednesday, after the pivot news broke, retail traders bought up $5.2 million worth of Allbirds stock, according to data from Vanda.
• It's relatively a small amount, and observers note that trading is pretty thin. Still, it's the most action that stock has had since its debut, when retail bought about $5 million.
• Vanda doesn't have data on automated trading or institutional dollars, but it's likely they piled in, too.

The latest: On Thursday, retail took profit — selling $950,000.

Zoom out: The stock jumped on "some combination of a very shallow float, automated momentum and unchecked hype," per William Blair's note. The firm said it was dropping its coverage.

Flashback: Back in the late 1990s, companies tried to signal that they were totally up on this new internet thing by slapping a ".com" or an "e-" or a "net" on their name.

• A publisher called MecklerMedia renamed itself Internet.com Corp, then went public and saw its shares jump to $72.25 from $14, as Wired noted recently.
• One paper from 2001, titled "A Rose.com by Any Other Name," found that the name changes did drive up stock prices. At least for a time.

The big picture: Allbirds is also likely hoping to attract some of the investor money sloshing around to to fund AI infrastructure, says Mark Malek, chief investment officer at Siebert Financial.

• He notes that there was a similar rush by companies again during the dot-com era that were seeking to build the internet pipes needed for the nascent technology.
• Some of them were existing public companies looking to pivot. These kinds of "reverse mergers," where a shell of a public company gets into a new business, "always existed on the fringe," he says.
• There have been a few in recent years that got into bitcoin and blockchain, too.

The bottom line: AI is a real technology having a surreal moment.