Allbirds Faces Delisting Threat After Stock Price Tumbles Below $1 for a Month

Fashnopsis:

• Stock Price Woes: Allbirds, known for sustainable shoes, faces delisting from Nasdaq due to its share price dipping below $1 for a month.
• Mounting Losses: The company suffered significant losses in 2023 ($152 million) and missed revenue targets in 2022.
• Future Uncertain: Allbirds is working to regain compliance but hasn’t revealed a specific plan. They’re also adjusting their growth strategy.

San Francisco-based shoe company Allbirds, originally from New Zealand, has received a delisting warning from the Nasdaq Stock Market due to its share price falling below $1 for 30 consecutive days. This notification from the exchange’s regulator gives Allbirds six months to regain compliance with the minimum listing requirement of $1 per share for at least ten business days in a row.

The company has until September 30, 2024 (180 days from the notice) to meet this requirement. If they fail to do so within the initial period, they might be granted an additional 180 days to achieve compliance.

This news comes after Allbirds appointed a new CEO in March following a year of significant financial losses. The company reported a net loss of $152 million in 2023, a sharp increase compared to previous years.

Allbirds acknowledged the delisting threat and stated their intention to actively monitor the share price. However, they haven’t disclosed any specific plan of action yet.

The company, known for its sustainable sneakers, has been struggling financially. Their first half of 2023 results showed a decline in both sales and profits. Compared to the same period in 2022, revenue dropped by 11% to $124.8 million, while losses grew to $64.1 million (up from $51.2 million).

The trend continued in the second quarter, with sales down 11% year-over-year. However, losses in Q2 were slightly lower compared to the previous year.

This financial performance follows a similar pattern in 2022. Allbirds saw losses increase to $101 million from $45 million in 2021. Additionally, their revenue fell short of their target, reaching $297 million instead of the projected $305 million.

In response to these challenges, Allbirds has announced plans to slow down store expansion and adapt their distribution model in 2023.

The company’s ability to regain compliance with Nasdaq listing requirements and turn around their financial situation remains to be seen.

Image Credits: All Birds