Topline
Tupperware shares rose about 115% this week and nearly 450% in less than two weeks for no apparent reason amidst a rise in retail investors and a short squeeze, leading many to believe, the company, which is facing a turbulent financial outlook, could become the latest benefactor of the meme stock craze.
Products of Tupperware company are presented at the fair eat'n Style in Cologne, Germany, on Friday, ... [+]
Key Facts
Tupperware’s stock price stood at $3.39 around 2:45 p.m. ET Friday, a 446% increase from less than two weeks ago when it was 62 cents on July 18.
This is despite the fact that the company, which is headquartered in Orlando, Florida, announced in April there was "substantial doubt" about its ability to stay afloat and in June, the New York Stock Exchange warned it that, because it’s market capitalization was so low—less than $50 million—it wasn’t in compliance with listing requirements.
The stock shares a lot of similarities with a group of stocks known as “meme stocks” such as GameStop and AMC Entertainment: it’s rising in price despite poor financial performance, and it is highly shorted.
Key Background
The concept of a meme stock originated in early 2021 when a group of retail investors, loosely organized in the online Reddit community r/wallstreetbets, joined together to buy up shares of GameStop, AMC Entertainment, Bed Bath and Beyond and other stocks that had been shorted by large investment firms. This intense buying frenzy made the companies’ stock prices skyrocket. The prices of these stocks has little to do with the actual performance of these companies and more to do with the whims of these online communities. The r/wallstreetbets community on Reddit has been discussing Tupperware’s stock boost some, mostly through jokes, but it’s unclear whether the community contributed to the price increase through a coordinated effort.
Big Number
9.69 million. That’s how many shares of Tupperware are shorted right now, representing 27% of all shares of the company, according to investment data firm MarketBeat.
Tangent
Earlier this month, Blackrock, the behemoth investment company, stepped in as an investment partner to Tupperware. No changes or major announcements have been made since that partnership began, but it’s likely the investment company will attempt to help Tupperware reduce its debt.
What To Watch For
Whether this stock comes crashing back down. Meme stocks are incredibly volatile, unpredictable and prone to very large swings.
Further Reading
AMC Stock Surges 38% After Court Rejects Stock Conversion Plan (Forbes)
GameStop Shares—Up More Than 35%—Lead Meme Stock Rally (Forbes)
MMTLP: The Wild Saga Of The Meme Stock That’s Left Thousands Of Shareholders With Nothing (Forbes)
