Tupperware’s shares tripled in a week, making it a potential meme stock.

Tupperware's shares tripled in a week, making it a potential meme stock.

The Rise of Tupperware: From Decline to Meme Stock Craze

Tupperware is no stranger to trouble. With sliding sales, overwhelming debt, and a plummeting share price, it seemed like the end was near for the iconic food storage brand established by Earl Tupper in 1946. However, against all odds, something unexpected happened.

In recent weeks, Tupperware has experienced a dramatic resurgence, with its stock price more than tripling in value since July 20. The sudden surge has prompted speculation that Tupperware might be the latest addition to the world of meme stocks, capturing the imagination of retail investors and redditors on popular trading groups.

According to data from Marketwatch, 27% of Tupperware shares available for trade have been “shorted” by investors. However, as the stock unexpectedly rose, some speculators who had borrowed shares hoping for a decline found themselves in a losing position. Forced to cover their losses, they rushed to buy more shares, further driving up the price.

The rise in Tupperware’s stock can also be attributed to a decrease in short interest over the course of the year, as retail investors show growing interest in the brand. Rumors began circulating when an article in the Orlando Business Journal mentioned an investment from BlackRock, sparking further interest among investors.

One member of the subreddit r/pennystocks, known for its 1.9 million members, advocated for investing in Tupperware when its shares were worth only 90 cents. The user argued that in a high inflationary environment, households would likely purchase more food storage containers as a means of reducing expenses. This sentiment gained traction among retail investors, fueling the stock’s unexpected ascent.

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However, industry experts are skeptical about the sustainability of Tupperware’s resurgence. Neil Saunders, managing director of retail for the GlobalData consultancy, cautions against irrational exuberance, stating that the surge is not based on rational or certain factors. He also notes that none of Tupperware’s underlying difficulties have disappeared, and the company still faces significant challenges.

These challenges include an 18% decline in sales last year and a staggering debt of more than $700 million, which far exceeds its newly inflated market valuation of $137 million. Over the past five years, Tupperware’s shares have plummeted by 91%.

Despite these alarming factors, retail investors continue to rally behind Tupperware. Members of r/pennystocks proudly boast about their stakes in the company and the potential profits they hope to make. The aura of excitement extends to r/WallStreetBets, the birthplace of the meme stock craze, where members enthusiastically compare Tupperware to Bed Bath & Beyond, another high-profile example of a meme stock that ultimately faced a sharp decline.

While it remains uncertain whether Tupperware will follow the same trajectory as Bed Bath & Beyond, one thing is clear: the meme stock playbook seems all too familiar. The combination of speculative investment, retail investor hype, and social media-fueled enthusiasm has the potential to shape the future of this iconic yet struggling brand.

Image Source: A 1980s Tupperware ad

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