Allbirds, from darling to disaster

Back in the 13th century when the enormous flightless moas still roamed across New Zealand, there were virtually no native mammals in the land. New Zealand was all birds. This was the inspiration for the name that Tim Brown and Joey Zwillinger gave the business they founded in 2014; Allbirds. Their business was listed on the New York Stock exchange on 3rd November 2021. While this was only 6 months ago, it will seem as distant as the 13th century to Allbirds shareholders who have seen the share price drop 87% since that first day of trading. What on earth has gone wrong?

Chart showing Allbirds drop 87% since its IPO in November last year

Back in 2014 Brown, the just retired All White soccer player, teamed up with engineer Zwillinger to make sustainable leisure footwear from Merino wool. In full disclosure, I thought Brown was a great soccer player and the wool shoes a fantastic idea, and I bought my wife a pair as a birthday present shortly after they brought the shoes to market in 2017. She loved them and people commented on how smart they were, more pairs were in due course purchased. This would fall into the classic advice from legendary investor Peter Lynch who sagely advised, if you love the product perhaps you should own shares in that company. However, the price you pay always matters.