The stock of WW International (WW), the company behind Weight Watchers, is crashing amid the growing popularity of obesity drugs such as Ozempic and as celebrity promoter Oprah Winfrey leaves the organization.
Weight Watchers’ stock is down 78% year to date, including a 60% plunge in the last month.
Now trading at $1.87 U.S., the company’s shares are firmly in penny stock territory, defined as any security that trades for less than $5.
The sharp decline in the stock comes as consumers flock to the new blockbuster weight loss drugs such as Novo Nordisk’s (NVO) Ozempic and Eli Lilly’s (LLY) Zepbound.
At the same time, Weight Watchers has been hurt by news that Oprah Winfrey has resigned from the company’s board of directors and is giving all her stock in the company to charity.
Winfrey had served as a spokesperson and board member at Weight Watchers since 2015. However, Winfrey recently disclosed that she too is now using weight loss medications.
Weight Watchers chief executive Sima Sistani has sent an internal memo to employees reassuring them of the company’s solvency and ability to continue as a going concern.
Analysts have raised questions about WW International’s ability to remain in business, noting that the company is labouring under $1.50 billion U.S. of debt.
Last year, Weight Watchers long-time rival Jenny Craig filed for bankruptcy and announced plans to shutter its business in the U.S. and Canada, citing the impact of weight loss drugs.
