Meme stock Tupperware jumps as debt restructuring deal boosts retail army

Traders work on the floor of the NYSE in New York

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 26, 2023. REUTERS/Brendan McDermid/File Photo

Aug 4 (Reuters) – Shares in Tupperware Brands ( TUP.N ) surged 44% on Friday after the maker of kitchen storage containers completed a debt restructuring deal as it tries to turn around its business and revive retail investor interest in the company.

The Florida-based company raised doubts in April about its ability to continue as a going concern as it struggles with falling sales.

Tupperware said Thursday it had reached an agreement with its lenders that will help reduce or reallocate about $150 million in cash interest and fees, and will give it immediate access to a revolving borrowing capacity of about $21 million.

The deal “provides a lifeline, yet the market environment could turn out to be extremely difficult,” said Bartosz Sawicki, market analyst at financial services firm Conotoxia.

Following an increase in demand for Tupperware containers to store food during the shutdown, the company has witnessed a decline in sales volume since 2022.

The company, widely recognized for its light-colored airtight plastic containers, had recently caught the attention of retailers, helping to drive its stock up more than 449% over the past three weeks.

Tupperware was the fourth most popular stock on investor-focused social media on Friday.

It was the seventh most traded stock by retail investors at 10 a.m. ET, according to JPMorgan data.

The price increase suggests that “many market participants were watching the company for this development,” said Peter Earle, an economist at the American Institute for Economic Research.

The stock gains were reminiscent of sensational “meme stock” rallies, where retail investors coordinate on social media and typically focus their speculative bets on companies that were struggling financially or had high short interest.

Research firm Ortex estimated that 30.8% of Tupperware’s publicly available shares were shorted. Bearish investors have lost $33 million on paper in the past three weeks.

Tupperware was the second most actively traded single stock of retailers over the past week, according to a note from JPMorgan.

The company had a market capitalization of $156.56 million on Thursday, having lost about 87% of its value since the end of 2020.

Yellow ( YELL.O ) and American Superconductor Corp ( AMSC.O ), the other meme stocks active in the past week, rose 17% and 4.3% respectively on Friday.

Reporting by Medha Singh and Savyata Mishra in Bengaluru; Editing by Krishna Chandra Eluri

Our standards: Thomson Reuters Trust Principles.

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