Tupperware shares soar as debt restructuring deal ignites retail investor interest

Tupperware Brands (TUP.N), a Florida-based kitchen storage container manufacturer, experienced a remarkable 55% surge in its shares on Friday, following the successful finalization of a debt restructuring deal that has rekindled interest among retail investors.

The manufacturer has been striving to revitalize its business operations since April when it raised concerns about its ability to sustain operations amidst a slump in sales.

In an announcement on Thursday, Tupperware revealed that it had reached a favorable agreement with its lenders, aimed at reducing or reallocating approximately $150 million in cash interest and fees. In addition, the successful deal grants the company immediate access to a revolving borrowing capacity of approximately $21 million.

“While this agreement provides a lifeline, the market environment remains challenging,” commented Bartosz Sawicki, a market analyst at Conotoxia, a financial services firm.

Tupperware enjoyed a surge in demand during the lockdown, as consumers sought containers for storing food, but since 2022, the company has observed declining sales volumes.

Known for its brightly colored plastic airtight containers, Tupperware has captured the attention of retail traders, leading to an impressive 449% surge in its shares over the past three weeks.

On Friday, Tupperware secured the fourth spot as the most discussed stock on the investors-focused social media platform, stocktwits.com.

The rapid increase in share value mirrors the remarkable rallies seen in “meme stocks” such as AMC (AMC.N) and GameStop (GME.N). These rallies are often driven by retail investors who unite on social media platforms and focus on companies facing financial difficulties and high short interest.

According to analytics firm Ortex, approximately 30.8% of Tupperware’s publicly available shares were shorted, resulting in paper losses of $33 million for bearish investors during the past three weeks.

Furthermore, according to a note from Peng Cheng, a strategist at J.P.Morgan, Tupperware ranked as the second most actively traded single stock by retail traders in the past week.

As of Thursday’s close, Tupperware’s market value stood at $156.56 million, marking a 63% decline in value over the past 12 months.

Besides Tupperware, other meme stocks also experienced activity in the past week, including Yellow (YELL.O), Nio Inc, and American Superconductor Corp (AMSC.O), which saw share increases ranging from 2.3% to 15% on Friday.