Investors are getting overly bullish on Tupperware stock for no apparent reason. Despite signs of trouble at the Florida-based company, including declining sales, its stock has soared 350% over the past five trading days.
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With this inexplicable boom, Tupperware has entered the meme stock club, which counts financially troubled companies like cinema chain AMC and bankrupt home goods store Bed, Bath & Beyond among its ranks. These meme stocks gain online virality, rise and fall in price based on social media buzz, and high trading volume. Their rise has nothing to do with the fundamental value of the stock and is mostly related to speculation and entertainment.
Tupperware, the new short squeeze candidate, attracted market interest on Monday (July 24) leading to a rally in AMC shares. The increase in the number of shareholders of the largest US theater market was due to a US court blocking a stock negotiation plan that would reduce AMC’s share price.
The 77-year-old homewares business, which made its public debut in 1996 following a spinoff from Kraft Heinz, was a prime candidate for meme stock status. “AMC news last week sent retail traders on the lookout for other meme stocks. Tupperware fits the bill and [brand] The name definitely helps,” Matthew Tuttle of investment firm Tuttle Capital Management told the BBC.
A Big Number: Tupperware’s Stock Has Gone Short
27%: How much of the company’s public float was short sold till July 15, according to Marketbeat.
Charted: The highs and lows of Tupperware stock
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“There is some optimism that change can happen and an investor has been found to help the company. However, there is no evidence of this happening, so any optimism is based on hope rather than certainty.,Neil SaundersFrom the BBC, Managing Director of Retail at GlobalData Consultancy
A brief timeline of the rise and fall of Tupperware
October 2022: Moving away from its legacy Tupperware parties and its own online sales, Tupperware is launching sales in Target stores to reach “brand fans and newcomers alike,” CEO Miguel Fernandez announced via a LinkedIn post.
March 2023: Tupperware withheld financial filings, citing misreporting due to accounting for income taxes and leases.
April 2023: The New York Stock Exchange (“NYSE”) warns the company against being in breach of compliance by failing to file Form 10-K on time. This gives the company 60 days to file Form 10-K or risk being delisted. The company, which intends to file in half but still raises doubts about its ability to continue, has hired financial advisors to help improve its capital structure. It considers all options from raising funding to reviewing its real estate portfolio to laying off.
May 2023: Tupperware said it has signed on investment bank Moelis & Co to help it explore strategic options. The company also said it found additional prior period misstatements in its financial reporting.
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Source: qz.com
