Meme Stock Tupperware Soars as Debt Restructuring Deal Ignites Retail Investors

Tupperware Brands (TUP), the kitchen storage container maker, experienced a significant boost in its stock price, surging by 44% on Friday. This surge came after the company finalized a debt restructuring deal in an effort to turn around its struggling business, attracting the attention of retail investors.

Earlier in April, the Florida-based firm expressed concerns about its ability to continue as a going concern due to declining sales. However, on Thursday, Tupperware announced that it had reached an agreement with its lenders, which will help reduce or reallocate approximately $150 million of cash interest and fees. Moreover, the deal would provide the company immediate access to a revolving borrowing capacity of around $21 million.

Market analyst Bartosz Sawicki from financial services firm Conotoxia acknowledged that the agreement provides a lifeline for Tupperware. However, he also pointed out that the market environment may still prove to be extremely challenging for the company.

Tupperware had experienced a surge in demand for its containers during the lockdown, but since 2022, it has faced a decline in sales volumes. Nevertheless, the company has caught the attention of retail traders, leading to an impressive 449% surge in its share value over the past three weeks

The company ranked fourth among the most discussed stocks on the investors-focused social media platform, stocktwits.com, on Friday. Moreover, it was the seventh most traded stock by retail investors, according to data from J.P. Morgan.

Economist Peter Earle from the American Institute for Economic Research noted that the price rally indicates that many market participants were closely monitoring the company for this particular development.

Tupperware’s recent share gains resemble the eye-watering rallies seen in “meme stocks,” where retail investors coordinate their speculative bets on social media platforms, typically targeting financially struggling companies or those with high short interest. According to analytics firm Ortex, approximately 30.8% of Tupperware’s publicly available shares were shorted, resulting in bearish investors losing around $33 million on paper over the past three weeks.

The company’s market capitalization stood at $156.56 million on Thursday, a substantial decrease of about 87% compared to the end of 2020.

Alongside Tupperware, two other meme stocks, Yellow (YELL) and American Superconductor Corp (AMSC), also experienced stock price increases of 17% and 4.3%, respectively, on Friday.