What happened
Shares of Tupperware Brands (NYSE: TUP) were tumbling 12% in morning trading Monday on no specific news, but it follows a huge run-up last week on earnings and an even larger gain for the year.
So what
The container maker surprised the market last week with a huge profit of $1.30 per share, a big change from the per-share loss Wall Street was expecting. The stock is up 80% in 2020 and over 1,000% higher from its 52-week low.
Image source: Tupperware Brands.
Investors early on questioned whether it could survive with the debt load it was carrying, which is why the latest quarterly report carries a "going concern" notice. Tupperware said it has over $501 million in senior notes that are due in June 2021, and management determined that "raises substantial doubt about the Company's ability to continue as a going concern."
Now what
Late Friday night, a law firm -- where one of the partners is the former attorney general of Louisiana -- announced it was investigating disclosures Tupperware made back in March disclosing potential fraud in its operations, which opened it to a class action lawsuit.
While the law firm had in June said it was investigating the company for the same thing, after the huge gains Tupperware's stock has made in recent weeks, investors may be thinking now is a good time to lock in profits.
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