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Weight Watchers’ stock price plummeted and the company removed Oprah Winfrey from its board of directors. getty
The CEO of WW International, also known as WeightWatchers, told employees in a memo today that the company is on track to beat its previously provided first-quarter guidance and that employees He ignored “stifling media coverage” and suggested the company’s stock price “will fall.” Take care of yourself. ”
Tattered shares fell another 20% today to $1.87, and are down 78% year-to-date. Two weeks ago, the company announced that star director and longtime investor Oprah Winfrey would retire from the board in May and donate her company stock. Winfrey, like 9 million other Americans, said this year that he is using weight loss drugs. Winfrey joined the board in 2015 after investing $43 million in the company and agreeing to let Weight Watchers use her name and image in marketing. According to the company’s disclosure, Winfrey must not allow companies other than Weight Watchers to use her name, likeness or endorsement in connection with other weight loss or weight management programs. . She also must not engage in any other “weight loss or weight management business, program, product, or service” during the strategy period and for one year thereafter.
CEO Sima Sistani said in a note today that the stock price does not reflect the company’s performance and that tradeoffs made in the short term will pay off in future growth. He also noted that the company’s long-term debt agreements do not mature until 2028 and 2029, giving Weight Watcher “ample time” to complete its restructuring. The company entered the weight loss drug industry, acquiring telemedicine platform Sequence for $132 million last year.
“Pivoting and completely transforming a business is not for the faint of heart,” Sistani said in the memo. “Again, we know that clickbait articles and their predictable, albeit temporary, effects on the market are not very good. But be proud, we disagree. I will prove you wrong.”
The memo said a private equity firm controlled by former chairman Ray Devane, who resigned in March 2023, sold the stock for $7.15 a share upon Mr. Devane’s departure, netting him $4.8 billion over 23 years. The news was announced immediately after. MarketWatch noted that Weight Watchers has used stars such as Charles Barkley, Jessica Simpson, James Corden, Jenny McCarthy and Jennifer Hudson over the years to attract dieters to its services.
This week, news also broke that the financier had hired a lawyer to negotiate debt with Weight Watchers.
Sistani today sought to resolve the issue in a memo to employees.
“As the week draws to a close, I wanted to take a moment to highlight some of the breathtaking media coverage that many of you may have seen,” she said. “We have strong liquidity and are not short of funds.”
“These headlines are often just speculation.”
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