Allbirds (Nasdaq:BIRD) erased more than 50% of its recent highs, falling to $7.57. The company set out to exchange its apparel and footwear assets for $50 million that will go toward building an AI data center.
The former shoe company, now called NewBirdAI, is showing that simply announcing a transformation to AI may not be enough to support the stock price. After an initial 750% rally, BIRD adjusted to a lower range, losing about 50% from its local high.
BIRD’s trading volume also shrunk from more than $288 million to just $1.9 million due to the immediate exodus of traders. The price move also raised questions about the company’s new phase of price discovery as an AI company.
Are the Allbirds still in danger of a short squeeze?
BIRD’s rise to local highs above $16 was not a natural expansion. The company was trading with minimal float and there was no way to borrow stock. In this way, the abnormal bull market was caused by announcement However, the trade itself hinged on closing recently opened short positions.
The company could be subject to a similar short squeeze, albeit on a smaller scale. As of April 24th, nasdaq data It showed that BIRD has open interest worth 18.4% of the stock’s float.
Over the past few weeks, we have seen a clear trend of increasing short interest. Since mid-March, the number of days covered has been reduced from 11.73 days to 4.17 days. The latest BIRD stock available to cover short-term open interest is 0.16 days.
Prime Securities is offering approximately 35,000 shares for new short positions. The company is still a niche company and hasn’t invited any large-scale attempts to cause a short squeeze.
BIRD has not gained any appeal as a meme stock
BIRD is not a meme stock, but is selected as a volatile asset. We expect another short squeeze, which could result in significant price movements.
BIRD’s recent rally has been compared to the sudden surge in Avis Budget Group (Nasdaq:CAR). CAR rose to over $713, but then fell about 70%. $217. The recent rise in stock prices cannot be compared to meme stocks. Traders on the WallStreetBets subreddit are predicting a series of short squeezes, long liquidations, and unexpected gains.
The newly booming stocks reflect general interest in speculative assets, but the rally is still considered too risky. BIRD or CAR is not tokenized or traded on the crypto perpetual futures market.
The AI story remains valid for some stocks, and Bitcoin mining companies are still in the green. companies like Airen There are clear advantages in building data centers, primarily because physical access to the grid is already established. Most mining stocks are Companies that have pivoted to AI have shown strong growth since the beginning of the year. Terrawolf (Nasdaq:WULF) is 80%.
