In a surprising turn of events, Allbirds has agreed to sell all of its assets and intellectual property to American Exchange Group for just $39 million. This sale price is a staggering one-tenth of the $348 million raised during its IPO in 2021, highlighting a dramatic decline in the company’s market value.

Following the announcement, shares of Allbirds surged 36% in after-hours trading, closing at $2.98 before the news broke. This increase reflects a market cap of $24.5 million, but the sale price still represents a premium compared to the trading price prior to the announcement.

Allbirds, which has been a staple in the Silicon Valley fashion scene, expanded aggressively into physical retail and adjacent product categories after its public debut. However, co-founder Tim Brown admitted that this rapid growth cost the company “some of our DNA.”

American Exchange Group, a privately held brand management firm with a portfolio that includes Aerosoles and Jonathan Adler, is set to acquire Allbirds as part of its strategy to diversify its offerings. The deal is contingent on shareholder approval and is expected to close in the second quarter of the year.

Proceeds from the sale will be distributed to stockholders in the third quarter, marking a significant shift for Allbirds after its ambitious expansion efforts. The company, founded just 11 years ago, has seen its valuation plummet from its IPO highs.

As the acquisition process unfolds, the future of Allbirds remains uncertain. Stakeholders are keenly awaiting further developments, particularly regarding the approval of the deal and its implications for the brand’s identity and product lines.

Details remain unconfirmed.