Allbirds Inc., the sustainable lifestyle brand known for its shoes and sneakers, soared in its public debut, skyrocketing as much as 71.5% after trading began on Wednesday.
The company is listed on the Nasdaq under the ticker “BIRD.” Plans to offer 20.1 million with shares priced at $15 , above its expected range of $12 to $14 each, were announced on Wednesday.
The stock’s first trade was at $21.21 at 11:17 a.m. Eastern for 1.9 million shares, which valued the company at about $3.04 billion.
Morgan Stanley, JPMorgan and BofA Securities are lead underwriters among a team of 17 banks working on the deal.
Allbirds /zigman2/quotes/229904251/composite BIRD -6.90% will have class A and class B shares. Allbirds intends to use the proceeds from the offering for general corporate purposes, and possibly to acquire businesses, products and services.
Based in San Francisco, Allbirds was set up in 2015 with climate change in mind and eco-friendly materials at the heart of its innovations. Its most famous shoe, the Wool Runner, is made with sustainably-sourced wool, a SweetFoam sole, created with what the company says is the world’s first carbon-negative green ethylene-vinyl acetate. Time magazine named them the “ world’s most comfortable shoes .”
The company continues to pursue fabric innovations with materials like tree fiber, sugar cane and crab shells. It also maintains a carbon-neutral supply chain.
“By focusing on sustainable materials, we have unlocked a broad set of opportunities that the rest of the industry has largely ignored, while creating products our customers love to wear as they tread lighter,” the company said in its prospectus.
Allbirds estimates that the carbon footprint for its sneakers is 30% less than for a standard pair.
This focus on sustainability, as well as the health and wellness aspects of its running shoes and other performance items touch on topics of interest for Gen Z and millennial customers, target demographics for the company.
However, the latest amendment to the company’s prospectus shifts the language on some of the company’s environmental ambitions .
And unlike Nike Inc. /zigman2/quotes/203439053/composite NKE -5.63% and its famous “swoosh” or the Adidas AG /zigman2/quotes/206448829/delayed XE:ADS -3.03% stripes, Allbirds shoes are intentionally designed with “the right amount of nothing.”
“[W]e strip away unnecessary details, sparing our customer from becoming a walking billboard, leaving a touch of Allbirds verve to signify the association with our brand,” the company says.
Still, the company says it’s capitalizing on the biggest trend of all at the moment: more casual fashions.
“We believe there has been a continued shift to wardrobe casualization, accelerated by the COVID-19 pandemic, whereby the lines have blurred between work, home, gym, and play. This casualization has demanded increasing versatility from consumers’ wardrobes, requiring footwear and apparel that are stylish, comfortable, and functional across a variety of use occasions,” the prospectus reads.
Allbirds operates as a direct-to-consumer company with items sold via the company’s website and 27 stores in eight countries.
Allbirds is also an emerging growth company, which means it does not have to make the same disclosures required of bigger public companies. A business remains an emerging growth company until it reaches a number of milestones, including annual revenue of more than $1.07 billion.
Revenue in 2020 was $219.3 million, up from $193.7 million the year before. Digital revenue was $$194.6 million in 2020. About 53% of 2020 sales were from repeat customers.
But the company’s net loss also grew in 2020 to $23.6 million from $14.6 million in the year-earlier period. For the first six months of 2021, the company had a net loss of $21.1 million, wider than the $9.5 million posted in the year-earlier period.
Revenue in the same period rose to $117.5 million from $92.8 million.
As a loss-making company, Allbirds will not be paying a dividend any time soon.
Since the company launched in 2015, it has sold more than eight million pairs of shoes to more than four million people around the world, including 3.3 million in the U.S.