Shares in WeightWatchers hovered near a record low on Friday after a brutal half-year saw weight-loss drug Ozempic drive its valuation into the ground.
It comes weeks after longtime investor Oprah Winfrey, who has admitted to using the new drug, announced she would step down from the board – sending shares into an initial tailspin.
But this week there was more bad news. Further damage was done after a report indicated the company had hired lawyers for debt negotiations.
Founded in 1963, WeightWatchers is perhaps one of the most well-known and iconic names in weight loss and diet programs around the world.
As of Friday afternoon, its value was just $175 million — a fraction of its $6.7 billion peak.
In February, Oprah Winfrey said she would be leaving WW International’s board
Founded in 1963, WeightWatchers is perhaps one of the most well-known names in weight loss and diet programs around the world. Pictured is an issue of its eponymous magazine
But in an internal memo to employees this week, CEO Sima Sistani tried to douse the flames, insisting the company was undervalued and that new strategies will generate growth.
“Our business is healthy and we are well positioned for the future as we continue our transformation,” she wrote. Sistani also described media coverage that suggested WeightWatchers had been condemned as ‘breathless’.
Pharmaceutical companies such as Novo Nordisk and Eli Lilly took the world by storm last year with a new generation of so-called GLP-1 diet products – Ozempic, Wegovy and Zepbound.
The drugs were widely effective and quickly became popular among Americans and others around the world who wanted to lose weight.
Ozempic has already been blamed for the death of another older diet brand. Jenny Craig, a household name since its launch in the 1980s, announced in May 2023 that it would shut down after drowning in debt.
In December, Oprah told People Magazine that she uses weight loss drugs, but indicated that she continued to use WeightWatcher’s strategies.
“I eat my last meal at 4, drink a gallon of water a day and use WeightWatchers principles to count points,” she said.
‘I had an awareness of (weight loss) medication but felt I had to prove I had the willpower to do it. I don’t feel like that anymore’.
Last year, WW International bought telehealth platform Sequence for $132 million in a move to embrace pharmaceuticals and start prescribing the blockbuster weight-loss drugs.
Jenny Craig (left) and her husband Sidney Craig founded weight loss company Jenny Craig, which went bankrupt in the US in 2023
Winfrey joined the board of WW International in 2015 after a $43 million investment
This week, shares of WW International, the parent company of WeightWatchers, fell to a record low on news that the company was in talks with lawyers about debt strategies
“Turning around and totally transforming a company is not for the faint of heart,” Sistani wrote.
‘I know that clickbait stories and their predictable, if temporary, market impact don’t feel great. But be proud because we will prove the naysayers wrong.’
When Oprah announced her departure in February, Oprah also indicated that she would donate her stake in WW International, Weight Watchers’ parent brand, to a museum gift.
Winfrey joined the board in 2015 after investing $43 million in the company. She also agreed to be included in Weight Watchers advertisements and commercials.
Within three years of her involvement, WW International’s shares were trading at more than $100 – reaching an all-time high of $103 in June of that year.
WW International, as it is now known, had a peak market cap of $6.7 billion in June 2018.
It has been valued at more than $2 billion in all but about five of the past 20 years — until it plummeted and never recovered after Ozempic was approved for weight loss in 2021.