Allbirds (BIRD) Stock

Read our Advertiser Disclosure.
Contributor, Benzinga
November 29, 2021
Last update: 7:45PM (Delayed 15-Minutes)
Get Real Time Here
Vol / Avg.486.485K / 1.233MMkt Cap171.677M
Day Range1.090 - 1.13052 Wk Range1.030 - 3.575

Under a purely capitalistic ethos, manufacturers of goods constantly fine tune their business models until they find the most efficient balance between top-line growth and bottom-line expenditures. But without constraints, major corporations for decades have driven costs as low as possible, even going so far as to outsource jobs to adversarial nations and depleting natural resources down to dangerous levels.

Frankly, big business — with the help of big government — could have continued down the path of fiscal cynicism were it not for broader awareness of holistic consequences. In recent years, emerging generations have expressed deep-seated concerns about ecological and societal footprints. Labeled environmental, social and governance (ESG), modern consumers often align their purchases within a set of moral values.

Indeed, Harvard Business School cited several pieces of research that indicated a majority of global consumers are willing to change their purchasing behaviors to limit their environmental impact. In other words, sustainability is not only desirable but potentially profitable.

When Did Allbirds IPO?

While big business may have dismissed the importance of sustainability in the so-called analog years, the advent of the internet and social media sparked an explosion of not only information but its access. Today, individual opinions can easily coalesce into a wider movement, meaning that it’s more vital than ever for businesses of all sizes to monitor the pulse of the nation.

The end result of the transition from companies purely doing well for themselves to doing good for the whole has levered huge ramifications on American-style capitalism. According to a KPMG study, 80% of top companies now report on sustainability. Indeed, not taking sustainable measures seriously risks material consequences for future growth, particularly as the environmentally conscious millennial generation now dominates the U.S. labor force.

This backdrop forms the context of Allbirds’ entry into the IPO calendar, making its debut on Nov. 3, 2021. Shares will trade on the Nasdaq exchange under the ticker symbol BIRD.

According to the company’s IPO prospectus filed with the U.S. Securities and Exchange Commission (SEC), Allbirds will offer 19.2 million shares at a price range between $12 and $14. At the midpoint of the estimate spectrum, the environmentally responsible footwear and apparel firm will raise gross proceeds of just under $250 million before deducting expenses related to the deal.

Also, should Allbirds price at $13 — the disclosure should arrive during the Nov. 2 trading session — it would command a valuation of $2 billion. A unicorn enterprise, BIRD stock features an extensive list of financial powerhouses underwriting the equity unit, including Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM) and Bank of America Corp. (NYSE: BAC).

Founded in 2015, Allbirds aims to correct the stereotype that a business focused on environmental and societal responsibility cannot be lucrative. Having grown into a global lifestyle brand, its loyal customers are willing to pay a premium for footwear and apparel manufactured from naturally derived materials, which include tree fiber, sugarcane and crab shells.

According to its IPO prospectus, Allbirds’ shoes feature a 30% lower carbon footprint relative to their traditional counterparts. Just as impressively, the company’s supply chain has enjoyed carbon-neutral status since 2019, bolstering the ESG credibility of BIRD stock.

Allbirds Financial History

Long known for promoting individual resilience and ruggedness, American popular culture has gone through significant changes in recent decades. Under the paradigm shift of digitalization, modern young consumers have grown increasingly aware of the apparel industry’s pollutant production and its subsequent negative effects on the environment. According to information by The Business Research Company, apparel manufacturing releases approximately 1.2 billion tons of greenhouse gases every year.

To put the above stat into perspective, the U.S. Department of Energy reports that highway vehicles “release about 1.6 billion tons of greenhouse gases (GHGs) into the atmosphere each year.” Therefore, even if the IPO of BIRD stock doesn’t match observers’ expectations, 1 thing is clear: Allbirds’ very existence is a win for humanity because it evangelizes the need for sustainable practices in the broader textiles industry.

Of course, sustainability-focused businesses must overcome the “show-me” attitude of skeptical investors. To that end, Allbirds delivers encouraging financial metrics. For instance, the company was one of the few retailers that performed well during the pandemic-disrupted year of 2020, posting net revenue of $219.3 million. That was up over 13% from 2019’s tally of $193.7 million.

Notably, Allbirds features a direct-to-consumer model via its e-commerce platform and physical stores. This diversity of consumer options allowed people to stock up on their favorite sustainable fashion even during the worst of the lockdowns. More importantly, momentum has carried into the current year, with revenue during the first 6 months of 2021 coming in at $117.5 million, up nearly 27% from the year-ago comparison.

But do the positive growth metrics imply a relatively risk-free take on BIRD stock? Unfortunately, the answer is no because of steep valuation concerns for prospective retail investors. Primarily, Allbirds is not profitable. For instance, while 2020 sales were up by double digits against 2019’s result, net loss almost doubled to $25.9 million from $14.5 million.

As well, the situation looks to worsen by the end of the current year. At the midway point, Allbirds already posted a net loss of over $21 million, comparing very unfavorably to a loss of $9.5 million in the year-ago comparison. At some point, the business needs to be more cost-effective, which raises long-term viability concerns of sustainability-focused companies.

Allbirds Potential

From a consumer sentiment perspective, Allbirds easily wins the ultimate moral victory. Though such a phrase carries a negative connotation in some contexts, data cited earlier confirms that major corporations are taking sustainability-related issues seriously. Thanks to the proliferation of social media and the rise of influencing agents, it doesn’t take much for negative press to derail a brand.

But just how much are sustainability-driven initiatives focused on profitability over risk mitigation? Unfortunately, no clear consensus exists. Yes, much evidence suggests environmental responsibility is important to consumers. As an example, a McKinsey & Company report indicates that consumers are willing to pay a small premium for sustainable goods.

Simultaneously, that same McKinsey article noted that the “willingness to pay melts away as the premium rises.” Here then is the nuance that may greatly affect BIRD stock: the underlying products are expensive compared to what bargain shoppers can find through less-responsibly sourced footwear and apparel.

If that wasn’t enough to make you think twice about BIRD stock, another McKinsey publication mentioned growing debate about how to approach sustainability-fueled products and services. Given that Allbirds hasn’t figured out the bottom-line equation even during a period of retail revenge, prospective investors must be careful about risk allocation.

Finally, Harvard Business School, while generally supporting sustainable business plans because of their incredible importance, acknowledged the difficulty in green businesses converting altruism into earnings.

How to Buy Allbirds IPO (BIRD) Stock

With BIRD stock scheduled to make its debut shortly, most retail investors must buy shares at the open, which is a straightforward process if you already know how to buy stocks. If not, follow the simple steps below.

Step 1: Pick a brokerage.

Any reputable brokerage will allow you to purchase traditional IPOs at the open. For building your acumen, you may consider narrowing your list of best brokers to services that allow you to apply for pre-IPO access or buying new issues at their initial offering price.

  • securely through Centerpoint Securities's website
    securely through Centerpoint Securities's website
    Best For:
    Momentum traders
    Read Review
  • Securely through Interactive Brokers’ website
    Securely through Interactive Brokers’ website
    Best For:
    Active and Global Traders
    Read Review
  • securely through Magnifi's website
    securely through Magnifi's website
    Best For:
    AI Investing
    Read Review
  • securely through Webull's app
    securely through Webull's app
    Best For:
    Intermediate Traders and Investors
    Read Review
  • securely through TD Ameritrade's website
    securely through TD Ameritrade's website
    Best For:
    Retirement Savers
    Read Review
  • securely through Plus500's website
    securely through Plus500's website
    Best For:
    Mobile Users
    Read Review

    86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Step 2: Decide how many shares you want.

Since IPOs represent a step into the unknown, they’re always risky. Therefore, choose a balanced share count to mitigate downside.

Step 3: Choose your order type.

Before placing your order, understand these market concepts.

  • Bid: The buyer’s best offer for a stock.
  • Ask: The seller’s lowest acceptable price.
  • Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
  • Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
  • Market order: Market orders guarantee fulfillment but only at the current rate.
  • Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.

Step 4: Execute your trade.

Follow these steps to execute a market order:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

Going Green to Get Green

Responsibility doesn’t necessarily imply a continually strait-laced demeanor. Rather, awareness and the desire to do good can potentially yield a lucrative business, as Allbirds demonstrates with its upcoming IPO. Nevertheless, BIRD stock faces challenges as management attempts to convince consumers to pay a sizable premium for the greater environmental good.