The meme traders are back. Shares of Tupperware (TUP) have exploded by about 165% this week and more than 300% over the last month for no discernible reason.
The Florida-based container company has been in hot water for some time. Sales are on the decline and Tupperware even warned in April that it was on the brink of bankruptcy.
In early June, the New York Stock Exchange even notified Tupperware that it was in noncompliance with the exchange’s rules because its market capitalization was too low, less than $50 million, over a period of 30 trading days. Tupperware’s average closing price, the notification said, was also less than $1 for that period — below the exchange’s threshold.
In early July, BlackRock stepped in as an investment partner to Tupperware, possibly to help them manage their debt load. But no new material announcements or changes have been made since then.
The surge in stock price would make some sense if there were any indication that the company had begun a turnaround or found an eligible buyer. But there’s no evidence that either of those things has happened.
There are, however, posts on Reddit that could offer an explanation.
“YEESH,” wrote one user about the company’s outlook. “Still threw $3,000 at it. Did the same with [Bed Bath & Beyond] last summer. As long as I’m not playing with too much and have a stop loss I’m ok with losing a few hundred dollars for a chance to moon again.”
“This will be the next big short squeeze, I went all in yesterday,” commented another.
On Thursday, the trading volume for Tupperware was three times higher than the prior 30-day average, according to FactSet.
It appears that, like GameStop and movie theater chain AMC before it, Redditors are trying to send the 77-year-old struggling business “to the moon.”
Also like other meme stocks, shares of Tupperware have been highly shorted. That means a lot of traders are betting that the stock has further to fall.
Before you join the “Tupperware party,” remember that meme stocks tend to be very volatile, with sweeping highs and lows. Libra Investment Services warned on Friday that investors in Tupperware face a high risk of loss.
Tupperware shares are still down nearly 30% year to date.
The company did not immediately respond to CNN’s request for comment.
