Allbirds’ IPO Was a Huge Success, Is It a Good Investment?

When is Allbirds Going Public?

Highly sought-after shoe maker Allbirds finally looks to go public, but should investors be flocking to buy a part of this start-up?

Founded in 2014, Allbirds is a sustainable and eco-friendly footwear manufacturer. The San Francisco-based startup crafts its products from natural and recycled materials and prides itself on its commitment to protecting the planet through sustainable practices and ethical processes.

The company has 32 stores worldwide and boasts numerous high-profile investors such as Barack Obama and Google founder Larry Page. It has developed an evangelical following, particularly amongst young urban professionals, for its stylish yet comfortable products. Time Magazine even went as far as calling them “the world’s most comfortable shoe.”

Now, Allbirds looks to trade publicly for the first time. The company is targeting a valuation of as much as $2.2 billion according to its recent filing with the U.S. Securities and Exchange Commission. An initial offering of 19.2 million shares will be made available, each priced between $12 and $14. This would net the company roughly $269 million if prices hit the high end of that predicted range.

When can I buy Allbirds stock?

We still don’t have a specific date for Allbirds shares to start trading publicly. However, the company has ramped up proceedings around its launch so it’s expected to happen soon with some believing it could be as early as next week.

What we can tell you, is that the company is expected to list on the NASDAQ exchange under the ticker symbol BIRD.

Allbirds’ financials

The financial outlook for Allbirds is mixed at best. Despite posting increases in revenue from 2019 to 2020, the company’s losses are widening at an alarming rate. Revenue rose from $193.7 million to $219.3 million in 2020. It currently sits at $117.5 million for the first six months of this year, putting it on course to beat last year’s total revenue again. However, losses of $14.5 million in 2019, $25.9 million in 2020, and a massive $21.1 million for the first half of this year should have potential investors worried.

More people have been returning to its brick-and-mortar stores which could result in a revenue boost for Q3 and Q4 respectively. Digital sales accounted for a massive 89% of total sales in 2020, so increased footfall in Allbirds’ 32 stores could prove quite profitable.

Allbird’s growth potential

Allbirds offers a number of intriguing prospects to investors, chief among them being the company’s ethical stance. Ethical investing as a trend is growing significantly, with people demanding more from companies than just profit alone. One quick trip to Allbirds’ website and it’s clear to see how much it wants to highlight the company’s sustainable nature. Notes on reversing climate change, how the company hopes to offset its carbon footprint, and a breakdown of the renewable materials used in production are all front and center for all to see.

Allbirds has also done a fantastic job of building an evangelical following among young professionals. Despite competing in the extremely packed footwear and apparel market, the company had repeat customers account for 53% of its sales in 2020. These customers also typically spend more too, with returning shoppers’ average spending increasing by 25% in the second year they shop at Allbirds. Building a loyal following is exceptionally difficult. Allbirds has managed to do this brilliantly, which should go a long way to convincing investors of its potential worth.

Not everything is cause for celebration, however. Investors should take note of a recent update to the company’s IPO prospectus. Allbirds slashed mentions of its sustainability framework by almost half in the amended document. The prospectus still leans heavily on the company’s ethical and sustainable stand-point, however, a walk-back of this proportion should not go unnoticed. Falling short of sustainability goals is nothing new for companies, but when your entire brand is built on being ethical and eco-friendly it could spell disaster for potential investors.

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