Jim Cramer Warns 'Look Out!' After Meme Traders Take Over In July: Why He Says Broader Market Is Spoiled, Tupperware Headed For Bankruptcy

Retail traders have flocked into Tupperware Brands Corp 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. 

What To Know: Tupperware shares soared more than 430% last month in a retail-driven short squeeze. 27.06% of shares are sold short, according to data from Benzinga Pro. 

The move appears to have been sparked by a surge in shares of AMC Entertainment 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. 

Check This Out: 10 Short Squeeze Stocks To Watch: Toro Corp, Bullfrog AI Holdings, Tupperware, Blue Apron And More

Why It Matters: Cramer said he can't wrap his head around the move. 

"I think Tupperware is gonna 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," Cramer said. 

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," Cramer said: "Our job as people who follow stocks is to say, 'look out!'"

TUP Price Action: Tupperware shares locked in gains of more than 430% in July. According to Benzinga Pro, TUP shares were up another 26.9% at $5.55 Tuesday afternoon.

Photo: Owen Byrne from Flickr.