This Shoe Company’s Stock Just Exploded Over 600%—Here’s Why

Allbirds, a company specializing in sustainably-made footwear, announced a massive strategic pivot on Wednesday morning.

The company will now focus on AI infrastructure, changing its name to “NewBird AI.”

This announcement facilitated a massive spike in the market. The company exploded more than 600% in early trading on Wednesday, according to a report from CNN Business.

Allbirds sold its footwear assets and branding to American Exchange Group for $39 million last month. The Wall Street Journal once valued the company at $4 billion.

Wednesday's announcement said the company reach a "definitive agreement with an institutional investor for a $50 million convertible financing facility," which will enable the company's unexpected pivot into the AI industry.

"The Allbirds brand and legacy will continue under the ownership of American Exchange Group for the benefit of all of its customers, investors as of the dividend record date will receive a special dividend, and investors who elect to continue to hold NewBird AI stock will be invested in a growing AI compute infrastructure business supported by the Facility," the company's announcement reads.

"The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet," the announcement continued. "NewBird AI is being built to help close that gap."

The company had a market cap of $21 million at close on Tuesday, according to CNBC. Shares jumped from $3 yesterday to over $17 after Wednesday's announcement.