Shares of Tupperware (NYSE:TUP) are up by another 35% today as the mania behind the home goods company continues. In the past five days, TUP stock is up by almost 200%. On TradingView’s list of most active stocks, Tupperware is currently in second place after dominating the list last week.
Tupperware hasn’t released any news to explain its staggering gains. This has led many to believe that a short squeeze is responsible for the price action. Based on the latest available data, there were 9.69 million shares of TUP stock sold short with a value of $6.22 million as of July 15. That’s equivalent to a high short interest of 27%. Generally, a short interest of 10% is viewed as high, while a short interest of 20% is viewed as very high.
TUP Stock: The Short Squeeze Continues
Another factor to consider for short squeezes is the cost-to-borrow (CTB) fee. The CTB fee is the amount that short sellers must pay to borrow stock. A high or rising CTB fee can indicate high short-seller demand, while a low or falling CTB can indicate reduced short-seller demand. On July 12, the CTB fee for TUP was 6.52%. Today, that fee has ballooned to 141.21%.
On the surface, Tupperware’s CTB indicates that short seller demand is high. In fact, the average CTB fee for a stock ranges between 0.3% and 3%. However, a high CTB has the possibility of aiding a short squeeze. This is because short sellers may sell out of their position in an attempt to escape the high fee. In addition, a high CTB fee lowers the chances that a short seller will emerge profitable.
Still, Tupperware seems to be a company facing lots of issues. Anyone holding shares of TUP is subject to high volatility and risk, especially given the gains in recent weeks. A quick scan of the company’s press releases shows an NYSE continued listing violation on June 7, a capital structure and liquidity improvement plan on April 7, and a delayed 2022 10-K filing on March 16. It isn’t difficult to see that TUP stock is being driven up by meme stock speculation instead of healthy financial figures.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
