Tupperware shares jump on debt restructuring deal

July job growth came in under estimates. What is the market reaction? Yahoo Finance Markets Reporter Jared Blikre joins the Live show to discuss Tupperware (TUP) shares surging on a debt restructuring deal, as well as trending meme stocks Sirius XM (SIRI), Carvana (CVNA), and Nikola (NKLA).

Video Transcript

- And now we want to talk a little bit about the market and the market reaction in terms of both this report. And overall, we've seen a downbeat week. But we want to go for some insight into specific stocks. We want to bring in Jared Blikre for some analysis on both the meme stock trade. And he has some other insights for us. He's joining us from the floor of the New York Stock Exchange.

JARED BLIKRE: Hi there, Diane. Let's take a look at the Wi-Fi interactive. I have been tracking Tupperware stock today. It has really been flying. In fact, over the last few days, up more than 300%. That's a three-month chart you're looking at. The latest news--

By the way, this company is pretty small. It's a quarter billion market cap. And it's been teetering on the edge of bankruptcy here. Let me see if I can pull up some of the statistics regarding the latest restructuring deal. But the bottom line is they're going to be able to postpone payments to some of their Lenders for some period of time. And here are the details you can see on your screen.

They're reallocating approximately $150 million of cash interest and fees. That's pure gravy for the bankers that the company is going to get to keep. They're extending the maturity of some of their debt, $348 million of principal and reallocated interest and fees. So that's going to be extended into 2027.

And PIK interest, that's payment in kind. That means they can pay back without cash. They can pay back maybe in stock or preferred shares, something along those lines. Cash is king. So that will mean a lot to a company that's struggling with bankruptcy possibilities.

And then immediate access to a $21 billion revolving borrowing capacity. So this just perhaps prolongs things. I don't want to say the inevitable, but anything can happen here. But I think my point is that I've seen a lot of other stocks like this, former meme stock.

And it has just been exploding to the upside. A lot of short interest in it. Something like 30% as was calculated a few days ago by S3 Partners. And at these highs just a few days ago, the short sellers had lost about $37 million, which is quite significant. Because market cap on this stock is only a quarter of $1 billion, $250 million.

So let me just show you what this stock looks like on some longer time frames. Here's year-to-date. You can see well a little bit positive there. But then you start extending out three years, down over 62%. Five years, what's this pattern here? It's deja Vu all over again. Pretty nasty for both the bulls and the bears. And then you take a look at a max chart. Well, this stock has been down over 99% a couple of different times here from its, what 2013 2014 peak.

This reminds me of some other stocks that have also been down 99%. Let's take a look at Sirius Corporation, Siri. This ticker was actually peaking in the dotcom boom. And very recently, let's take a look at a year-to-date chart. You can see spiked up here, but has come down significantly as oftentimes happens when you get a short squeeze. Easy come, easy go.

Here's Carvana. I'm going to show you a max chart. This stock was down 99% at its peak. I should say at its nadir there. You take a look at the year-to-date, it's been holding on to a lot more of its gains than Tupperware-- excuse me, than Sirius. But here's Nikola. Here's another one.

You would say, OK, on a two-month basis, this is a high flyer, up 369%. But then again on a Max basis This is one of those stocks that peaked over the pandemic and crashed 99%. So my word to traders is just be wary of these stocks. They're going to be getting a lot of interest as they pop up on our trending tickers list. But these are not necessarily the best investments as we saw with Siri. That can be dead money for decades.

- Oh, I love that insight and advice. Professor Jared Blikre, thank you so much.