Tupperware and Yellow join meme-stock club with rally.
Tupperware and Yellow join meme-stock club with rally.
Meme Stocks Making a Comeback: Tupperware and Yellow Corp Surge Amidst Retail Traders’ Hype
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The world of meme stocks is once again ablaze as retail traders flock to financially weak companies like Tupperware Brands Corp (TUP.N) and Yellow Corp (YELL.O), driving their stock prices to new heights. These rallies, reminiscent of the GameStop frenzy earlier this year, are fueled by hype on social media platforms such as Reddit’s WallStreetBets. While some may find these fluctuations perplexing, others find humor in the chaotic nature of the market.
Unlikely Heroes: Tupperware and Yellow Corp
Tupperware Brands Corp and Yellow Corp have recently experienced astonishing surges in their stock prices. Yellow Corp, a US trucking company, saw its shares skyrocket by over 67%. This comes after it more than doubled in value during the previous trading session, following news that the company had ceased operations and filed for bankruptcy.
Similarly, Tupperware Brands Corp, known for its iconic food storage containers, witnessed a 29% increase in its share price. Incredibly, this rise compounded the company’s already staggering 575% surge over the past seven sessions. These considerable upswings have left many financial experts baffled, prompting them to question the logic behind the market’s behavior.
Dan Raju, CEO of brokerage Tradier, remarked, “There is really no logic” in these market movements. He attributes the phenomenon to the combination of interest rate hikes tapering off and directional traders seizing the opportunity to join in on the action. These traders delve into social media echo chambers, often gravitating towards unprofitable companies burdened with debt, creating what has become known as meme stock rallies.
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The Meme Stock Resurgence
The resurgence of meme stocks, aptly named due to the skyrocketing prices fueled by hype on social media platforms, is not isolated to Tupperware and Yellow Corp. As the broader US stock market experienced a rise in anticipation of interest rates peaking and the avoidance of an impending recession, struggling companies like Bed Bath & Beyond (BBBYQ.PK), Revlon, and Hertz Corp also witnessed stellar rallies.
This surge has been reflected in the market activity of retail investors. Data from J.P. Morgan reveals that Yellow Corp held the title of most traded stock by retail investors on Tuesday, closely followed by Tupperware. In fact, retail traders’ market orders made up 17.6% of total market flows on July 31, a significant increase from the near six-month low of 14.8% on July 20. It seems that retail investors are once again embracing the excitement and volatility of meme stocks.
An Index Reflecting the Meme Stock Frenzy
In response to the renewed interest in meme stocks, Roundhill Investments created the Meme index, or .MEME. This index tracks the performance of stocks that have experienced meme-driven rallies. On Monday, the Meme index hit a more than one-year high, further highlighting the current hype and enthusiasm surrounding these stocks.
The Chaotic Nature of Meme Stocks
It is important to recognize the chaotic nature of meme stocks. The actions of retail traders driven by social media hype can lead to extreme price volatility, often detached from the traditional fundamentals of a company. While this may be a cause for concern for some investors, it also presents opportunities for those willing to navigate through the whims and fancies of the market.
As meme stocks continue to captivate the attention of retail traders and financial experts alike, only time will tell if these rallies are sustainable or if they will eventually fizzle out. In the meantime, buckle up and enjoy the rollercoaster ride of meme stocks – a thrilling blend of economic factors, internet hype, and unexpected outcomes.
Disclaimer: The content of this article is for informational purposes only and should not be considered financial advice. Investing in meme stocks carries significant risks, and readers should exercise caution and conduct thorough research before making any investment decisions.
