Market News – 28 April 2026

Johnny Lee writes:

While the world nervously observes the ongoing conflict between the United States and Iran, global equity prices continue to enjoy a rebound in April, as the S&P 500 reaches new records.

This month has also been an incredible ride for shareholders of NASDAQ-listed company Allbirds. Allbirds was originally a footwear and apparel company, with stores across the United States, Asia and the Middle East. There are also two stores in New Zealand, both in Auckland.

Allbirds was founded by former All White Tim Brown – not of Infratil fame – and saw tremendous success for its early shareholders upon listing in late 2021. At one stage, the company carried a market capitalisation of over $4 billion USD and produced revenues in the hundreds of millions. Allbirds’ New Zealand connection led to it featuring disproportionately in local share portfolios, similar to Rocket Lab.

Unfortunately, the share price of Allbirds struggled after listing and now languishes around $7 USD a share, down 97% since its listing. 

On the face of it, the Allbirds story may look to be one of a popular product struggling in an overly competitive market. However, a recent announcement saw the share price rally – admittedly from a very low base – over 500%.

Allbirds has sold its retail business and is pivoting to the GPUaaS sector, including a name change to NewBird AI. GPUaaS, or Graphics Processing Units as a Service, is a business that purchases and “leases” computer chips to end users. This allows companies to access high end computing equipment without the up-front cost of procuring, insuring and maintaining the necessary hardware.

Such leases are useful for companies that lack the necessary funds to purchase their own equipment, or those who require only temporary use of hardware.

Obviously, shoe design and graphics processing units are worlds apart and led to some concern that the company was simply engaging in a new fad to bolster its share price. Time will tell. The early response from the market has been positive. The company’s market capitalisation, at time of writing, sits around $100 million NZD. This is comparable to Kathmandu-owner KMD Brands, or listed aged care provider Radius Residential Care.

These concerns are also fuelled by a growing trend of companies using AI, or at least the concept of AI, to drive interest from investors. Indeed, the market has now created a term for this (“AI Washing”) and led to research from some analysts around the impact on share prices when a company renames or pivots strategically to AI.

Such pivots rarely meet success. Different skillsets are often needed at the management and board level, and investors are often reluctant to commit capital to a business model they no longer understand. High levels of stock turnover usually follow.

Even in New Zealand, we have seen some new listings emerge with a distinct focus on Artificial Intelligence or Cryptocurrency. Many of these companies have yet to find success, leading to some wariness from long-term investors towards the concepts.

A similar trend occurred with “Blockchain technology”. One of the better-known examples of this was that of Long Island Iced Tea Corporation, which produced tea and lemonade in the early 2010s. The company pivoted in 2017 and renamed itself to “Long Blockchain Corporation”. Its share price soared after the announcement of the strategic shift but collapsed in the years following and no longer trades on a public exchange.

This is not to suggest the same fate awaits shareholders in the new NewBird AI company. Hopefully, the company will find success in its new strategic pivot, and long-term shareholders see some recovery of their investment. While such a turnaround is rare, it is not unheard of. Nokia, the telecommunications giant, began by operating a pulp mill in Finland.

Hopefully, the AI and GPUaaS business models prove enduring. Shareholders in NewBird AI will now need to decide whether to follow the company’s management into this new endeavour or take advantage of the share price spike and move onto a different investment.

EBOS is the latest business to update its earnings guidance, as the elevated cost of oil continues to weaken margins.

In EBOS’ case, the price of oil is impacting the business two-fold. While fuel costs are driving up the cost of freight and transport, there is also a secondary impact occurring across the hydrocarbon industry with regards to other end-products, including plastic wrapping and polystyrene. 

This is not isolated to EBOS. While the cost of fuel has been headline news since the conflict began, there have been other reports of countries struggling to secure supplies of oil-based products like plastic bags and rubber latex, particularly across Asia. 

For EBOS, the spike in these costs has led to a modest decrease in its formal EBITDA guidance, which has been reduced from a midpoint of $625 million to a midpoint of $615 million. Last year’s figure was $585 million.

At this stage, EBOS is choosing to absorb the additional costs. The company has highlighted that its ability to rapidly pass on these additional costs is limited, due in part to the nature of its business and the ability of consumers to afford such higher costs.

Investors continue to assume that the conflict in the Middle East will resolve soon. Unfortunately, messaging has grown increasingly inconsistent, which has led to significant market volatility. At this stage, the oil price remains around $95, with a ceasefire in place to facilitate negotiations. 

For EBOS, the increased costs have led to a meaningful decline in its forecasts for the year, and this has been reflected in its share price, which fell 3% following the announcement. 

One should expect more such revisions from our listed market, particularly those exposed to the oil price and oil products. Until a definitive conclusion is reached and oil supply normalises, costs will be unpredictable, and businesses will need to focus on those costs that they are able to control.

Travel

6 May - Christchurch - Johnny Lee

28 May - Kerikeri - David Colman

29 May - Whangarei - David Colman

8 June – Nelson – Chris Lee

9 June – Blenheim – Chris Lee

Chris Lee and Partners Ltd