Struggling Tupperware, Yellow join meme-stock club with rally

Tupperware Brands

01/08/2023 17:38

By Medha Singh
       Aug 1 (Reuters) - Shares of debt-ridden Tupperware
Brands Corp  TUP.N  and Yellow Corp  YELL.O  have been on a tear
as retail traders dip back into financially weak "meme stocks". 
    U.S. trucking company Yellow's shares jumped over 67% on
Tuesday, after more than doubling in the previous session as the
Teamsters Union said the firm had ceased operations and was
filing for bankruptcy.
    Tupperware Brands Corp, which has also warned of a possible
bankruptcy amid a slump in sales, rose 29%, adding on to a 575%
surge over the past seven sessions on no apparent reason.
    "There is really no logic," said Dan Raju, CEO of brokerage
Tradier.
    "Interest rate hikes tapering off pushes directional traders
to jump back into the market, touch the social media echo
chambers and they latch on to - generally what I call -
unprofitable companies riddled with debt, creating these meme
stock rallies."
    The resurgence in meme stocks, named so because their
rallies were driven by hype on social media, comes alongside a
broader rise in U.S. stocks on bets that interest rates had
peaked and the economy would avoid a recession.
    The surge in Tupperware and Yellow's shares was reminiscent
of stellar rallies in other struggling companies such as home
goods seller Bed Bath & Beyond  BBBYQ.PK , nail polish maker
Revlon and car rental company Hertz Corp  HTZ.N .
    Yellow was the most traded stock by retail investors at
11:30 a.m. ET on Tuesday, while Tupperware took the third spot,
J.P. Morgan data showed.    
    Retail traders market orders made up 17.6% of total market
flows on July 31, up from a near six-month low of 14.8% on July
20, according to J.P. Morgan data.
    Roundhill's Meme index  .MEME  hit a more than one-year high
on Monday.

 (Reporting by Medha Singh in Bengaluru; Editing by Devika
Syamnath)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; Twitter: https://twitter.com/medhasinghs;))