Retail traders have flocked into Tupperware Brands Corp (NYSE: TUP) in recent weeks as so-called meme stocks reenter the spotlight. Jim Cramer is warning the meme stock frenzy is a bad omen for broader markets.
Tupperware Brands have been catered to everyday Americans and the rest of the world for food essentials that includes leftovers, lunch for the average American, and use for prep meals for those aiming for a healthy lifesytle.
The move appears to have been sparked by a surge in shares of AMC Entertainment (NYSE: AMC) at the beginning of last week. The temporary AMC resurgence was driven by a court rejection of the company’s proposed settlement with shareholders. New developments in the case led to a pullback in the stock, but Tupperware has continued to trek higher.
The entertainment box office recorded close to $300 million for Barbie and Oppenheimer as it has shed records.
Cramer said he can’t wrap his head around the move.
“I think Tupperware is going to have to file bankruptcy and yet people are buying it like crazy,” he said Tuesday on CNBC’s “Squawk On The Street.”
What’s really going on is the meme traders are back in full force, he said, adding the biggest gainers over the last three weeks are names that were heavily shorted.
“Good riddance to the month of July. In the second half we had a recapturing of what happened in 2022, which is the memes took over, and I don’t care for them,” said Cramer.
Investors need to start focusing on “real companies” again, he said, noting that when meme stocks take over, it “has led, historically, to a decline in the market.”
The CNBC host said the has been doing a lot of research on how the market reacts following a meme stock buying spree, and it’s not good.
“I’m just trying to warn people,” said Cramer: “Our job as people who follow stocks is to say, ‘look out!'”
Tupperware is the biggest essential for everyday American when it comes to the kitchen and the daily needs.
It is often used by Americans who are blue collar workers or average office workers that work normal work hours.
Produced in association with Benzinga