Allbirds shares were down 18% to US58c (92.8c) late in today’s Nasdaq session after the Kiwi-American firm revealed its plan to avoid a delisting for trading under US$1 ($1.60) for too many days.
Allbirds shares sink 18% after company reveals plan to avoid Nasdaq delisting
Ex-All Whites captain Allbirds founder Tim Brown at his Auckland City store. Photo / Dean Purcell
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When the compliance notice was issued, Clare Capital investment banker Alex Gordon predicted a split as the mechanism to avoid a delisting.
While that has proved to be the case, reverse splits could be living on borrowed time, at least as a mechanism to address a compliance notice.
Last month, the Nasdaq started consulting on a series of measures to tighten delisting rules.
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They included a proposal that if a company implemented a reverse stock split within the prior year, the exchange would immediately begin delisting procedures upon non-compliance rather than providing an automatic 180-day compliance period.
Allbirds made a net loss of US$19.1 million ($30.56m) in its June quarter, compared to US$28.9m ($46.24m) in the second quarter of 2023.
The Kiwi-American firm’s cumulative losses for 2024 now stand at US$46.5m ($74.4m), compared to US$64.1m ($102.56m) in the first half of last year.
June quarter revenue fell 27% from the year-ago $70.5m ($112.8m) to US$51.6m ($82.56m).
The firm finished the quarter with US$87m ($139.2m) in cash and equivalents versus the year-ago US$140m ($224m).
The firm said it was in the final stages of a restructure that included store closures, a move from direct sales to distributors in various regions, and founders ex-All White Tim Brown and biotech engineer Joey Zwillinger stepping down as co-CEOs.
The new executive team was drawn from more traditional retail and footwear backgrounds.
Brown remained an Allbirds director but had also recently taken on roles outside the company, becoming a partner with Icehouse Ventures and emerging as one of the backers of A-League newcomer Auckland FC.
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Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
