William Blair drops coverage of Allbirds after ‘Hail Mary’ news

William Blair dropped coverage of Allbirds (BIRD) after the company announced it was raising $50M in a convertible financing facility from an unspecified investor to invest graphics processing unit compute capacity. “This is by any measure a Hail Mary, in part as indicated by the proposed allowance in the associated proxy for management to fully dissolve the business within 12 months of the planned special meeting for approving these measures on May 18,” the analyst tells investors in a research note. Blair says the shares went “hyperbolic” today, trading at an enterprise value around $140M on the news from closer to $10M pre-release. The firm sees “deep uncertainty” around Allbirds’ move into cloud compute. While the sale to American Exchange Group could bring a special dividend, a third-party analysis places the company’s liquidation value at 2c to $1.83 per share, the firm highlights. Blair attributes today’s stock rally Allbirds’ “very shallow float, automated momentum, and unchecked hype.” The stock closed Wednesday up 582%, or $14.50, to $16.99.