Allbirds, the California-based producer of Wool Runner merino shoes and other eco-friendly sneakers and apparel sold in a direct-to-consumer mode, started trading on the Nasdaq exchange under the ticker symbol BIRD at an opening price of $21.21 per share on Wednesday, Nov. 3. That was more than 40 percent above the $15 price of the offering, resulting in a market capitalization of around $3 billion. The stock price gained ground in the course of the day, getting close to $30, or double the initial offer price, It then hit a peak of $32.44 in the course of trading. At the end of the day, it closed at $28.64, or 91 percent above the initial offer price.
Valuing the company at about $2.15 billion with 143,480,229 share now outstanding, the offer price of $15 announced the day before was higher than the previously proposed range of $12 to $14 per share. The company also raised the total number of shares being initially offered to 20,192,307 from 19.2 million, leading to gross proceeds of $302.9 million - $57.7 million for selling shareholders and $245.2 million for the company itself. Investors have also been given a 30-day overallotment option for 504,645 additional shares from the company and up to 2,524,200 shares from some of its shareholders, which would take the total number of shares being offered to 23,221,152.
Morgan Stanley, JP Morgan and BofA Securities were selected as lead book-running managers for the IPO.
The high stock market capitalization $4.4 billion given to Allbirds at the peak of trading was equal to around 20 times annual revenues. It is clearly indicative of the strong value that investors are giving to sustainability and DTC, although the company is still making losses, due in part to intense marketing and the opening of many physical stores. The digital channel represented more than 80 percent of Allbirds’ revenues of $219.3 million in 2020. Besides merino wool, Allbirds uses sustainable materials such as tree fibern sugar can and crab shells, and sustainable packaging.
The B Corp has not made a profit since its foundation in San Francisco seven years ago, and it is on course to record an eight-figure deficit in 2021. Joey Zwillinger, one of Allbirds’ two founders and CEOs, told CNBC that the company was very close to breakeven results before the pandemic struck, and that it has a “very clear and short-term path to profitability.” He would not have taken the company public, he said.
In its pre-IPO statement to the U.S. Securities & Exchange Commission, Allbirds asserted that consumers “are looking for brands that are purpose-native and authentically sustainable, as customers demand transparency with respect to the products they buy,”
