Shares of Allbirds, the merino wool sneaker retailer that sold itself last month for $39 million, soared 594% after a press release trumpeted the company’s entry into the battle for artificial intelligence cloud services through a $50 million convertible financing and a rebranding as NewBird AI, according to The New York Times.

This is not the first time a company has attempted an improbable pivot to a more newsworthy market. In 2017, Long Island Iced Tea Corp. rebranded itself as Long Blockchain Corp., CNN reported. While the stock initially surged as much as 500%, SEC insider trading charges and Nasdaq delisting followed.

Just as it was unclear how an iced tea company could compete in the blockchain business, the same can be said about Allbirds. The sneaker company — whose stock had fallen 99% from its high — lacks AI expertise, GPU procurement teams and data center experience, making this a new growth strategy with a low chance of success.

But maybe it makes sense as a follower of the meme-stock trend that has propelled shares of AMC, bitcoin-treasury companies (following MicroStrategy’s lead) and others. “The motivation behind the corporate pivot is sensible, the market reaction less so,” Interactive Brokers chief strategist Steve Sosnick told CNN.

“A 6x or 7x move for a company that is literally ditching its prior business model for one in which it has no demonstrated expertise says quite a bit about a market froth and investor willingness to chase moves,” Sosnick........

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