Tech bros give Allbirds the boot

2 minute read

The Allbirds flagship store sign is seen in Manhattan, New York City, U.S., September 7, 2021. REUTERS/Shannon Stapleton

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NEW YORK, Aug 9 (Reuters Breakingviews) - Turns out tech bros aren’t as loyal to footwear and sustainable pledges as once thought. Allbirds (BIRD.O), the seller of utilitarian sneakers made from sustainably sourced materials, lowered its sales forecast and widened its loss expectation on Monday, sending shares crashing. Like Meta Platforms (META.O) and Snap (SNAP.N), it is also cutting jobs. And at a mere $632 million, the company’s prospects as a stand-alone company look to be walking out the door.

Shares are now about a third of their price from last November when it completed its initial public offering. If the company inks its sales forecast of $315 million this year, its value, net of cash, will be worth 1.3 times revenue. That’s less than half the valuation of established sneaker company Nike (NKE.N) and about a quarter the multiple of Roger Federer-backed firm On (ONON.N).

If Silicon Valley decides style and virtue-signaling are less valuable when working from Idaho, Allbirds will continue to struggle. But at some point, the company could be an attractive target for a firm looking to back into a public listing, say, like athletic sneaker company No Bull, or one like Nike, just hoping to spruce things up with a cheap pair of kicks. (By Jennifer Saba)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

(This story refiles to add dropped word in first paragraph and to update link in second paragraph.)

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Editing by Lauren Silva Laughlin and Amanda Gomez

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