The Oprah effect: Weight Watchers’ shares soar after Oprah Winfrey buys in

The Oprah effect.
The Oprah effect.
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Weight Watchers shares catapulted to a seven-month high during pre-market hours today (Oct. 19) on the news that Oprah Winfrey is taking a 10% stake in the weight-loss company.

The media mogul and talk show host joined the weight-loss program and is helping expand the company’s focus from weight loss to healthier living, Weight Watchers said, in a statement. The effort is designed to help the company, which makes a big chunk of its revenue from membership fees, grow its declining member base.

“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,” said Winfrey. “I believe in the program so much I decided to invest in the company and partner in its evolution.”

Having Winfrey, who has spoken frankly about her own weight losses and gains, attached to the company could also boost interest in the program, which trailed off when the company shifted away from celebrity-dominated advertising campaigns in favor of highlighting everyday people.

In addition to participating in the program and owning 10% of the company, Winfrey will serve on Weight Watchers’ board and receive an option to buy an additional 5% stake.

This morning, Weight Watchers shares soared more than 60% from yesterday’s closing price, reaching $10.99 for a period before the trading bell rang.

That’s a welcome boost for investors, who have seen the company’s stock crumble this year, with shares falling 73%.

The weight-loss program has been struggling to hold on to members who now have an influx of cheap, new online diet tools and fitness apps to choose from.