Oprah Winfrey, who owns a substantial portion of Weight Watchers International, took a $58 million blow to her investment portfolio today following a dip in the company’s stock, USA Today reports. Financial analysts cited a slowdown in enrollments for the weight-loss company as the driving force behind a sudden drop in the stock, of which Winfrey owns approximately 8 percent.
The company reported Tuesday that executives were “disappointed” with the rate of enrollment so far in 2019, with many investors becoming skittish considering that the beginning of a new year is typically a time when people are eager to sign up for self-improvement ventures such as joining a diet and wellness program like Weight Watchers.
Last year, the company underwent a rebranding with the support of Winfrey, pivoting somewhat away from traditional weight loss and calorie counting in favor of a broader approach to wellness and natural living. Although overall subscriptions were up compared to this time last year, the company reported a sharp decline in revenue since the previous quarter.
Weight Watchers (now “WW”) CEO Mindy Grossman acknowledged the “soft start” to 2019 as compared to the prior year, citing the poor early-year recruitment period. To get the company back on track, Winfrey personally pledged to “play a central role in our upcoming TV and digital marketing campaign,” Grossman said.
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While it has obviously been a tough week for Winfrey’s investment portfolio, her investment in Weight Watchers overall has performed well over time. She initially invested in 2015, picking up 10 percent of the company for $6.79 a share. Even after today’s downturn, the pop culture icon has still seen her initial investment more than triple, including profits made when selling off some of her shares in the early part of last year.
Still, since the 2018 rebranding as “WW,” the company has dropped by more than 70 percent. Analysts continue to express concern about the future of WW.
“Beyond the 2019 challenges, we believe the pathway for [WW] to return to subscriber growth in 2020 is unclear, despite management planning to launch new diet program innovation in 2020, given the increasingly competitive environment, particularly as the company’s rebranding initiative to wellness from weight loss seems to have fallen flat,” said J.P. Morgan’s Christina Brathwaite in response to this week’s news.
A number of analysts have downgraded their evaluations of WW, with several suggesting that further selloffs are likely and that active investors could get involved in pushing for a new direction.