Oprah Winfrey is $24 million lighter, thanks to Weight Watchers. As previously reported, the lifestyle mogul, who recently bought a 10 percent stake with options to purchase 5 percent more in the popular weight loss company (for $43.2 million), nabbed a spot on the board of directors, in addition to becoming a spokeswoman for the brand. According to Weight Watchers, the company had hoped Winfrey’s collaboration would help boost subscription numbers and sales.
Unfortunately, on Thursday, Feb. 25, the company reported a 21 percent drop in fourth-quarter net revenue, which sent its shares tumbling more than 27 percent in extended trading. As a result, the paper value of Winfrey’s stake plunged a whopping $24 million, reports Reuters. Fortunately, Winfrey still managed to come out on top, gaining almost $75 million since making her investment.
As for what caused the sudden loss, in a call with investors earlier this week, Weight Watchers’ chief financial officer, Nicholas Hotchkin, blamed marketing and “winter-season” expenses as factors leading to a loss of 20 cents per share, reports USA Today. And while membership was down at the top of 2015, earnings reports marked a sharp turnaround last October when the billionaire mogul — who has had very public ups and downs with her weight over the years — signed on.
In fact, the stock price doubled after Winfrey announced her new partnership via Twitter, by posting a video saying that thanks to Weight Watchers, she had lost 26 pounds even while eating bread every day. Despite the steep stock drop however, one analyst, R.J. Hottovy, said the pullback is expected but fixable. “The market may have been looking for a more pronounced ‘Oprah effect’ in 2016, likely explaining today’s pullback,’’ Hottovy said in Morningstar. “We see encouraging signs, including strong reception to Oprah Winfrey-led marketing efforts, ‘Beyond the Scale,’ platform enhancement, and increased levels of digital engagement. We’ve consistently stated that 2016 will be a transitional year for Weight Watcher and that it will take time to build consumer awareness of recent platform changes.’’
Meanwhile, Winfrey’s BFF, Gayle King, also began Weight Watchers’ diet plan, last September. Just last week, King posted a snap via Instagram featuring her scale at 159.2 pounds, showing she has lost more than 25 pounds.
