Proactive Investors - Shares of Tupperware Brands (NYSE:TUP) Corp tumbled ahead of Wednesday evening earnings as retail investors engaged in profit taking of the latest “meme stock” to take hold.
The stock had soared to nearly 7x its value over the past week and a half, from a close of $0.67 on July 20 to $5.38 on Tuesday. Some investors have now cashed in, dropping shares of the plastic container producer 28% to $30.88.
What’s more, Tupperware is scheduled to report earnings after the bell, and investors haven’t exactly been bullish on the merits. In April, the company said it was nearing bankruptcy with some $705 million in debt.
The Tupperware frenzy, along with a similarly unexplained jump in the stock of trucking company Yellow, bears strong resemblance to the early 2021 Reddit-driven phenomenon that sent GameStop (NYSE:GME), AMC and others skyrocketing.
The forum r/wallstreetbets, where much of the activity originated last time around, is full of posts comparing Tupperware to previous meme stock darling Bed Bath & Beyond.
"I think people always want to buy the stock that is going to be the one that explodes to the upside," said JJ Kinahan, chief executive at IG North America, according to reporting from Reuters.
"Another aspect is that these are often companies with products people know and so that also leads to a certain attraction. The last reason I believe is the large percentage of short interest in these companies," Kinahan said.