Last week, Oprah Winfrey announced that she had taken a 10% stake in Weight Watchers and will be joining the company's board. The share of the company soared high up to 169% within two days before losing a little stream. The company's stock gained 132% again in just one week, to $15.75.
Weight Watchers had been left lifeless by dieters and investors - in actual fact, a greater part of the freely accessible shares had been sold short, which contributed to last week's increase as short sellers hurried to cover up their positions.
Ofrah's involvement can lead the stock to garner much higher stakes in the approaching year. The actress commits to hold her share for moreover two years and has also an option to acquire another 5$ at $6.97 per share.
Still there are questions arising about whether Weight Watchers could survive given that there are a lot of completions went it comes to dieting apps. $1.6 billion this year, was a complete down from $1.83 million in 2012. The decline had put the company to nasty cycle; because it cannot afford the marketing fees, but Winfrey's recruit is really a game changer.
It isn't just the marketing angle that Winfrey helped the Weight Watchers. The actress also paid $43 million for the newly issued stocks that enables the company to collect funds to repay its debtors.
Alex Fuhrman, an analyst with Craig-Hallum Capital Group said that Oprah is "the absolute A-plus brand ambassador out there", after bumping his price target to $20 from only $10 on the news.
This is not only the first time Winfrey became a game changer. Some of the books of the little-known authors became best sellers after Winfrey's blessing. And in 2008, her endorsements to Barack Obama cast another one million votes against Hillary Clinton.They all called it "Oprah Effect", this is the come on of Oprah Winfrey's endorsements that pulls up sales and consumers decisions.
