Bird has been the word on Wall Street since a fashion innovator began trading under that symbol. Allbirds (NASDAQ:BIRD) specializes in eco-friendly footwear and has bases in both the United States and New Zealand, bringing an established global reach that makes it unique among U.S. shoe manufacturers. The Allbirds stock IPO dropped yesterday and was quick to start soaring, rising to impressive heights in its first trading day. Although its come down a bit since then, Allbirds is an interesting case for both investors and analysts.
Allbirds Stock IPO: What Happened?
In its first day of trading, BIRD stock rose by as much as 90%, opening at $21.21 per share and closing at $28.64. For a company that had initially priced its individual shares at $15 pre IPO, those numbers are impressive.
As InvestorPlace contributor Chris MacDonald reported, the company received a significant increase in valuation after investors began to think it had undervalued itself. This is rather rare, and it often leads to an impressive debut. The Allbirds IPO saw 20.2 million shares offered, raising a total of $303 million.
Shares are currently down 8% for their second day, trading at $26.52 each. While this is certainly a downtick, the stock is still up 4.34% since its debut.
Why It Matters
Allbirds opted to go public with the mission of attracting investors who value sustainability. Co-Founder and CEO Joseph Zwillinger told CNBC’s Squawk Box that he felt investors were drawn to the opportunity to put their money in an investment vehicle that stood to create “better outcomes for the planet.”
Its debut comes at an opportune time, as the need for sustainability within the world of consumer goods is being increasingly apparent. This trend has caught fire over the course of 2021 as established fashion brands have worked to incorporate sustainable practices. The year began with debuts from consignment retailers Poshmark (NASDAQ:POSH) and ThredUp (NASDAQ:TDUP), both of which have enjoyed a generally good year of trading.
More recently, Wall Street saw the debut of trendy eyewear retailer Warby Parker (NYSE:WRBY), another company with an emphasis on sustainability. Since its IPO in late September, WRBY is up more than 4%. Its success indicates that the industry landscape is ripe for companies in this space, as was demonstrated by the Allbirds stock IPO.
What It Means
Allbirds only operates 27 brick-and-mortar stores as of now, but the company is looking to expand this number greatly in the years to come. As can be expected, most sales this year came through digital channels.
While the easing of Covid-19 restrictions has brought an increase in in-store shopping this year, shoes will always be a product that lend themselves well to digital marketplaces, as consumers can buy with confidence know that they will fit. Additionally, Allbirds products tend to be light, due to their sustainable materials, leading to lower shipping costs, which can only serve to drive more sales.
Earlier this year, data was released that indicated that 66% of global consumers have indicated that they would be willing to pay more for sustainably produced goods. That’s excellent news for companies like Allbirds. Sustainability is overtaking the fashion world as even companies like H&M (OTCMKTS:HNNMY) prioritize it in their operations. Allbirds is well positioned to continue revolutionizing footwear. Anyone looking for a bullish play on fashion should be watching it closely.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
