‘Oprah ef­fect’ wears off as Weight Watch­ers sinks

USA TODAY US Edition - - MONEY - Matt Krantz @mat­tkrantz USA TO­DAY

Oprah Win­frey’s halo ef­fect on Weight Watch­ers is dis­ap­pear­ing fast.

The me­dia mogul and 10% owner of Weight Watch­ers has seen $117 mil­lion in wealth van­ish as shares of the com­pany have crashed 66% from their high notched in Novem­ber 2015 on en­thu­si­asm over her in­volve­ment with the com­pany.

Shares of Weight Watch­ers were down an­other 68 cents, or 6.6%, to $9.68 Tues­day af­ter the com­pany said it is re­plac­ing its CEO. The value of the com­pany has dropped $1.2 bil­lion in value since the peak hit af­ter Win­frey came on board.

Re­al­ity is set­ting in now as things haven’t worked out as many in­vestors hoped af­ter Win­frey formed close pro­fes­sional ties with the com­pany in Oc­to­ber 2015.

The stock is still above the $6.79 a share it traded for be­fore Win­frey took her stake and be­came the third-largest in­vestor. But the level of en­thu­si­asm is prov­ing in hind­sight to have been over­done. The com­pany’s rev­enue dur­ing the just-com­pleted sec­ondquar­ter of $309.8 mil­lion is flat with a year ago, although profit is up 9.3%. The com­pany lost $10.8 mil­lion in the first quar­ter.

Win­frey is now us­ing her posi- tion on the board to push for man­age­ment changes. Late Mon­day, the com­pany said it will re­place the CEO of three years as of Sept. 30, James Cham­bers, the same chief ex­ec­u­tive who was run­ning the com­pany when Win­frey joined.

Shares of Weight Watch­ers more than dou­bled to $13.92 a share the day Win­frey an­nounced in mid- Oc­to­ber 2015 she was more closely as­so­ci­at­ing her­self with the weight-loss com­pany, in­clud­ing buy­ing 10% of the com­pany’s stock and join­ing the board.

Shares soared 169% in just two days to $18.25 af­ter the an­nounce­ment of Oprah’s in­volve­ment on Oct. 19, 2015, turn­ing into a tidy two-day profit for Win­frey of $73 mil­lion.

That doesn’t in­clude the pa­per gains from 3.5 mil­lion ad­di­tional shares she could buy by ex­er­cis­ing op­tions.

The en­thu­si­asm for the com­pany con­tin­ued up un­til Novem­ber 2015 when the stock hit its high of $28.05 a share.

All told, the value of Weight Watch­ers soared $1.4 bil­lion in the months fol­low­ing Win­frey’s in­volve­ment.


Win­frey has lost $117M on pa­per.

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