A headline caught my eye today “Allbirds’ AI pivot sends its stock soaring 600%. We’ve seen this movie before.” (Marketwatch.com 4/15/26). Allbirds is/was a shoe company. They sold their shoe biz for $39 Million last month (this is after it was valued at $4 Billion after it’s IPO in 2021). Now it’s decided to refocus it’s business as an AI infrastructure provider. I don’t want to get into specifics of whether this works or doesn’t, but a shoe company that pivots into AI seems borderline absurd. The market thinks otherwise, pushing the stock up over 600% as of this writing. This got me thinking of one of my favorite stories from my early career.
I was 23 years old at the time. The dot com bubble was in full swing and everybody and their mother wanted a piece of it. A client called and demanded to sell his entire holdings of Intel, which was 100% of his high 5 figure portfolio, and buy K-Tel. K-Tel was a record company that sold records and other products on infomercials and late-night TV ads. Nothing sexy or even memorable comes to mind about K-Tel at the time except one thing: they were changing their name to K-Tel.com and would start selling their products on the internet. The stock went from $3 a share to $34. I don’t remember what price the client paid for K-Tel, but it eventually became a penny stock.
Allbirds and K-Tel may be apples and oranges to those in the AI or tech space. If you go to the article cited at the beginning of this post, the author goes into detail about companies who moved from one business to another with mixed success. Their examples focus on two companies shifting to cryptocurrency then one moving to AI. As a luddite I take pause to wonder if this is Wall Street hype to the tune of (scams?) K-Tel, Gamestop or Microstrategy (both loading the books with crypto as a stock price driver), AMC (accepting cryptocurrency) or myriad other cautionary tales. As Mark Twain is famously credited: “History doesn’t repeat itself, but it often rhymes.”
