The former talkshow host, who heads her own media empire, nets $32.5m profit from initial share price spike on news she had bought 10% of company
Oprah Winfrey is a fan of Weight Watchers, so much so that she has bought 10% of the company.
“I believe in the program so much I decided to invest in the company and partner in its evolution,” the talk show host turned-billionaire businesswoman said on Monday as she announced the deal, which includes personal endorsements and a seat for her on the company’s board.
Investors appeared to have faith in Winfrey, who has been dubbed “queen of all media” and built up a $3bn (£1.9bn) business empire. Shares in the Weight Watchers surged 84% after the news broke. The share price spike – from the $6.79 she paid on Friday night to as high as $12.50 on Monday morning – has made Winfrey a paper profit of $32.5m.
“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,” she said in a statement.
Winfrey has long shared her battle with weight loss with her millions of fans, and once wheeled a red wagon filled with 67lbs of fat on to her talk show to illustrate just how much weight she had lost.
“With all the other things that I know how to do and all the other things that I’m so great at and all the other accomplishments, I can’t believe I’m still talking about weight,” she said in an interview for her magazine, O, five years ago. “For me it is not a cosmetic issue. It is an emotional issue. When my engine runs down, my drug of choice is food.”
Weight Watchers, founded by Jean Nidetch in her Brooklyn kitchen 52 years ago, has struggled to maintain its relevance as the weight loss market has dramatically shifted to weight tracking apps and online services, most of which are free. Weight Watchers subscriptions start at $20 a month, and membership has been falling fast.
Jim Chambers, Weight Watchers chief executive, said: “Through our conversations, it became clear that there is a tremendous alignment between Oprah’s intention and our mission. 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 the option to buy a further 5% of the company, but she is prevented from selling any shares for two years to show that she has faith in the long term prospects for the company.
This article was written by Rupert Neate in New York, for theguardian.com on Monday 19th October 2015 15.58 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010