Weight Watchers may be Oprah Winfrey’s newest “favorite thing.” Shares of Weight Watchers skyrocketed by as much as 90 percent with Monday’s news that Winfrey bought a 10-percent stake in the company and has joined its board.
The media mogul, 61, bought 6.4 million shares of Weight Watchers at Friday’s closing price of $6.49. The deal was worth more than $43 million.
Winfrey said in a statement, “Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for. I believe in the program so much I decided to invest in the company and partner in its evolution.”
“Through our conversations, it became clear that there is tremendous alignment between Oprah’s intention and our mission,” Jim Chambers, Weight Watchers president and CEO, said in a statement. “We believe that her remarkable ability to connect and inspire people to realize their full potential is uniquely complementary to our powerful community, extraordinary coaches and proven approach.”
Winfrey has had a strong influence on consumer products with her book club and former television feature “Oprah’s favorite things.”
Weight Watchers hasn’t secured “an effective spokesperson ever since it hit a home run with Jennifer Hudson back in late 2010,” J.P. Morgan analyst John Faucher wrote in a research note. Hudson parted ways with the company last year.
Morningstar analyst RJ Hottovy said he was “intrigued” by the potential marketing opportunities with Winfrey’s various television, print, and digital properties, but is waiting to hear more from the New York-based company.
While Winfrey’s involvement “is likely to resonate with Weight Watchers’ traditional over-50 female demographic, it’s unclear how the company plans to bolster its brand positioning with a younger audience,” he wrote in a research note.