Oprah Loses Weight, Weight Watchers Stock Soars
Shares of the stock were up over 19% after an announcement was made by Winfrey that she lost 40 pounds by using the company’s program. The company, whose stock has dropped 54% during 2016 prior to the surge on Thursday, is unveiling new television advertising that features Winfrey touting the weight she lost.
The talk-show veteran and media magnate became a big part of the comeback plan of Weight Watchers in 2015 when she purchased a big stake in the business and became a member of the board.
During October of last year, when it was first announced that Winfrey had purchased a stake in the company, shares doubled in one business day.
Though that rally has since faded, the subsequent endorsements by Winfrey of Weight Watchers have helped to give temporary jolts to the company stock.
Shares gained over 27% during two days in December of 2015, when Winfrey tweeted about using the program of the weight loss company. Another 20% bump occurred in January of 2016 after Winfrey announced she lost 26 pounds while eating bread each day.
The most recent push starts next week, just before the holiday for New Year’s. The upcoming weeks are of critical importance to Weight Watchers as the company usually adds close to 40% of its new customers during the first three months of the year, when resolutions entice people to seek new diets.
Stock climbed to as much as $12.50 Thursday its biggest gain intraday since February. Weight Watchers was hit hard from the rise of free apps for fitness and a move from strict counting of calories amongst dieters.
However, Winfrey’s influence had injected new life into the brand. The company has added new members for three consecutive quarters following years of quarterly declines.
The company, based in New York hopes that the new ads with Winfrey, which emphasize how she can still eat her tacos and pasta, will convince dieters to make updates to their program is an effective tool to weight loss.
Despite the gains in subscribers, it has been up and down all year for Weight Watchers. The business has billions of dollars of debt and the stock is shorted. CEO Jim Chambers in September announced he was leaving the business after being leading it for three years.
The announcement sent the stock plummeting to its lowest in close to one year.