The lunchbox is through the roof. Tupperware, the well-known American company that markets containers for food preservation and storage, is scaling the stock market at full speed. Accumulate a rise of 500% in just over a week and 700% in the last two.
Only yesterday the appreciation at mid-afternoon was 23.6%, up to around 5.30 dollars per title. To give you an idea of ??the acceleration, on July 21 they had dropped as much as 67 cents. Still, we’re still a long way from the all-time highs reached on Wall Street in late 2013, when shares topped $94.
Volatility rules, but so does speculation, in a business that has experienced various ups and downs throughout its history. In fact, this unexpected and meteoric rebound in Tupperware shares does not correspond to the health of the company’s business. Rather, it comes after the company received a sticky notice from the New York Stock Exchange in June on Wall Street after seeing that its average capitalization over a consecutive 30-day period was less than $50 million. At the same time, he warned the company that it was crossing another red line: Tupperware’s average closing price of common stock was less than $1 over a rolling 30-day period (penny stock).
The company went so far as to admit last April that there were “substantial doubts” about its ability to continue due to its financial situation. Tupperware lived a moment of glory during the pandemic, when with the confinement and the closure of the restoration, investors attributed a rosy future to it, anticipating a boom in food delivery. Since then the titles have fallen 97% from January 2021 until this summer.
Various analysts warn that behind the vertiginous rise in the company’s shares there may be speculative movements such as those that in January 2021 encouraged the fever of ‘meme shares’ such as GameStop. Likewise, another of the possible explanations for the ‘rally’ would be the hasty closing of bearish positions on the stock.
The mechanism is always the same: retail investors (with anti-establishment vocations) buy shares of a company that is on the verge of bankruptcy with the aim of causing losses to hedge funds and short investors, who take bearish positions on certain securities. and they make a profit when the price of those securities falls (and a loss when it rises).
The stock’s recent gains have cost short sellers roughly $37 million in July, according to data from research firm S3 Partners, as the share price rose more than 10 times. This is how the rebels protest on Wall Street: raising the container.
