Even though Tupperware Brands Corp. has been threatening to go out of business for months, individual investors are still driving an incredible rally reminiscent of the meme stock craze during the epidemic.
The well-known food storage container manufacturer has increased by 768% over the last two weeks as buyers pour money into the stock, punishing short sellers and igniting enthusiasm on retail trading platforms.
The hysteria demonstrates that the meme-stock craze, which in 2021 propelled rallies for massively shorted stocks like GameStop Corp. and resulted in the failure of hedge fund Melvin Capital, is still alive. Since July 21, when Tupperware’s market value was $40 million, retail investors have purchased shares for $15 million, according to data from Vanda Securities. Since then, it has almost multiplied by six, reaching $239 million.
While mentions on Reddit is WallStreetBets forum increased in tandem with the rising stock price, Tupperware’s ticker was among those trending in the retail trader chatroom Stocktwits. The company has been warning that it has serious doubts about continuing as a going concern since April and has hired financial advisors to look into alternative strategies.
It discovered a significant flaw in its internal controls in March, which required it to restate earlier figures.
The corporation and a few of its creditors came to a waiver arrangement on June 30, but they still anticipated not having enough cash to pay their interest in July.
As more individuals ate at home as a result of the Covid-19 outbreak, sales of kitchenware increased, sending the company’s shares soaring. It was brief. Following a peak in January 2021, the stock fell 97% in the two and a half years that followed.
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