Since mid-July, shares of Tupperware — yes, that Tupperware — have soared by about 850%. On Friday, they climbed another 35%.
What the heck is happening?
And should you seek a piece of the action?
Let’s answer that second question first: No. Hard no. Keep your distance.
As for the first question, Tupperware declared a few months ago that it might go out of business. The company carries lots of debt, is running out of cash and faces plenty of competition on the food-storage front.
That was good enough for self-serving online traders, who promptly made Tupperware the latest “meme stock.”
A meme stock is one that takes off like a rocket as skeevy investors run a pump-and-dump scheme to boost a stock’s price and then unload their holdings on unsuspecting latecomers.
Tupperware is getting that treatment.
The meme element notwithstanding, this remains a business in distress. Even though the company this week announced moves to restructure its debt, its long-term prospects remain unchanged.
Moreover, the rumor mill says Tupperware may have to resort to layoffs and selling its real estate to make ends meet.
Rapid stock movements attract attention, and they prompt some unwary investors to worry that they’re missing out on a good thing.
Yes, there’s money to be made, but only if you’re in on the ground floor of a pump-and-dump racket.
For the rest of us, the only sure thing about meme stocks is that someone — probably you — is going to get burned.