For a while, plastic storage container legend Tupperware (NYSE:TUP) looked like it was on its last legs. With hopes that someone would step in and buy it out, it limped along, until all of a sudden it caught a second wind. That second wind came mainly from a short covering spree, and now, Tupperware is up over 21% in Monday afternoon’s trading.
Shorts are driving a lot of Tupperware’s price right now, and the numbers tell an unusual story. Shorts are up from 23% in late July to over 27% right now, despite share prices surging 304% in the last month alone. Volume is screamingly high; peak volume was 45 million shares back in late July. And this is despite word that Tupperware itself is looking at new “strategic options,” and watched its annual sales get cut in half as Tupperware is replaced by everything from butter tubs to take-out containers.
However, one big move that gave Tupperware a lot of extra room to run regarded its debt load. Tupperware, at last report, reached a deal with creditors that buys it plenty of space. The deal reduces or otherwise reallocates about $150 million in interest, as well as fees, and extends the term of about $348 million in principal to 2027. In fact, Tupperware proved ready to make the most of the debt deal even before it happened. It’s been working to mix up its marketing mix, and building out an omnichannel strategy that takes it far beyond the Tupperware parties of yesteryear.
Yet, even as things look better for Tupperware, hedge funds don’t seem so sure. Hedge fund confidence stands at a Negative on Tupperware, as they divested an extra 222,500 shares from their overall holdings. This also represents the fourth consecutive quarter that hedge funds have reduced their holdings of Tupperware stock.