By Bhanvi Satija
Oprah Winfrey is stepping down from WeightWatchers' board at a time the company is struggling to turn a profit. Its stock has lost more than half its value so far this year. Photo: Image Press Agency / NurPhoto / NurPhoto via AFP
Shares of WW International, also known as WeightWatchers, have taken a pounding as the company disclosed that celebrity shareholder Oprah Winfrey would exit its board later this year and donate her stock in the weight management firm.
The exit of the media icon, who has been a board member since 2015, comes at a time when WW is struggling to turn a profit. The stock fell 24.5 percent to $2.88 and has lost more than half its value so far this year.
Winfrey will donate her shares to the National Museum of African American History and Culture and continue to advise and collaborate with WeightWatchers and CEO Sima Sistani.
She owned 1.13 million shares worth $6.34 million as of 1 January, LSEG data showed.
The donation will help "eliminate any perceived conflict of interest around her taking weight loss medications," WW said late on Wednesday.
Oprah's departure is "just another piece of evidence in the overall picture that people would much rather take a jab than have to adjust their lifestyle," said Troy Harmon, chief investment officer at financial services firm Henssler Financial.
Harmon, referring to popular obesity drugs offered by Eli Lilly and Novo Nordisk, said "wouldn't be surprised, if she resurfaced as a spokesperson for one of the drug manufacturers".
The WW stock had more than doubled in value last year on hopes for a boost from its acquisition of telehealth platform Sequence, which marked its entry into the lucrative market for prescription obesity drugs.
The talk show host said last year that she uses prescription medication to manage her weight.
Winfrey had first reported a stake of 14.7 percent or 9.88 million shares in WW in October 2015.
WW shares have also been hurt due to "exacerbated concerns" around its growth prospects and liquidity, Barclays analyst Stephanie Davis said.
- Reuters
