Retail traders pile into Allbirds after odd AI pivot. History shows it won't end well

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Retail traders stampeded into Allbirds

after the troubled shoemaker slapped an artificial intelligence label on its business, a set-up that market history suggests rarely ends well once the initial hype fades.

Shares of the company skyrocketed more than 800% at one point on Wednesday after the firm detailed shocking plans to rebrand as NewBird AI and shift toward compute infrastructure. The surge added well over $100 million to its market value, which had been just $21 million a day earlier.

Retail investors were quick to embrace the new narrative, data from Vanda Research showed. Net purchases hit a record $5.2 million in a single day, surpassing even demand seen during the company’s 2021 IPO.