For eight years, Oprah Winfrey was a spokesperson — and major shareholder — for WeightWatchers. However, the Chicago megastar has had a change of heart and is leaving the brand behind. Which has had catastrophic consequences for WW stock. What does this mean for the weight-loss industry?
How Oprah’s Exit Impacted WW Stock
In 2015, Oprah Tweeted that she had lost 26 pounds using the WeightWatchers program. For that reason, she then invested and became a board member of the corporation.
AS A RESULT, WW STOCK SOARED 20% IMMEDIATELY AFTER!
Source: The Guardian
This is not the first or last time that a celebrity’s words have impacted a company’s stakes — positive or negative.
So on March 14th, when Winfrey admitted using “weight-loss medication” and her WW exit, the stock plummeted 25%.
The A-lister will stay on the board until May and is donating her shares. In a statement she will continue to collaborate with the brand to:
“…ELEVATING THE CONVERSATION AROUND RECOGNIZING OBESITY AS A CHRONIC CONDITION, WORKING TO REDUCE STIGMA, AND ADVOCATING FOR HEALTH EQUITY.”
But new advances in weight management medications are not just costing WeightWatchers spokespeople…
It’s costing them thousands of regular customers.
The Future of the WeightWatchers Brand
Aside from Oprah stepping down, other concerns have affected WW Stock…
Namely, the company’s debt load and the possibility of weight-loss drugs making diet programs obsolete.
To get ahead of employees’ and investors’ fears, the WeightWatchers CEO, Sima Sistani, issued an internal memo.
Sistani wrote in the document how it planned to work in tandem with the rise of these medicines.
WW acquired Sequence — now, WeightWatchers Clinic — to facilitate access to the drugs in addition to lifestyle changes.
Also, the CEO affirmed their ability to pay off their debt citing the majority is not due until 2025. (However, its $1.5 billion debt is ten times higher than its current equity.)
When a major player in an industry takes a blow, the future of that industry looks grim as a whole. As such, soon none of us will be counting WeightWaters points anymore…
As of the writing of this article, WW stock is down to $2.02 per share.
Be Great,
GCTV Staff
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