New York (CNN) — Tupperware was left for dead; a relic of a lost time when leftovers storage had but one dominant market player. So why is its stock up 47% today?
The company, which just four months ago said it had doubts about whether it can remain afloat announced late Thursday that it had reached a deal with its creditors to reduce its interest payment obligations by $150 million. It also secured $21 million in new financing, an extension on the deadline for paying back about $348 million in debt and a reduction in the amount of debt it owes by around $55 million.
In other words, Tupperware (TUP) has been given new life.
“I am confident that this agreement provides us with the financial flexibility to continue executing on our near-term turnaround efforts as well as our long-term strategy to create a global omni-channel consumer brand,” said Tupperware Brands CFO Mariela Matute. “We appreciate the support of our lenders, who share in our strategy, as we move forward.”
Investors cheered the news, sending the stock surging. Tupperware is still an extremely troubled brand, and the stock is still trading below $6 a share. But that’s a huge improvement from the 61 cents it was selling for just two weeks ago.
Since July 18, shares of Tupperware have skyrocketed 850%.
Some of that has been fueled by some meme energy, with online investors pumping up a stock they believed had low risk and high potential for reward. It also got a boost after investment giant BlackRock stepped in as a partner last month, possibly to help manage its debt load.
But Tupperware’s prospects aren’t great. It had been running out of cash, challenged by a large number of competitors. Younger consumers lack awareness of the 77-year-old brand that was once a household name. Tupperware has been considering layoffs and property sales to stay afloat.
Once sold exclusively by multi-level marketers, similar to Avon and Amway, Tupperware parties were a staple of a bygone era. The company only last year started selling its products at Target.
In early June, the New York Stock Exchange even notified Tupperware that it was in noncompliance with the exchange’s rules because its market capitalization was too low, less than $50 million, over a period of 30 trading days. Tupperware’s average closing price, the notification said, was also less than $1 for that period — below the exchange’s threshold.
The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Time Warner Company. All rights reserved.