Oprah's Departure Impacts WeightWatchers Stock

Oprah Winfrey has announced her departure from the board of WeightWatchers after serving as a director for nearly a decade. Her decision comes amidst increased competition from Ozempic, leading to speculation about the reasons behind her departure.

The company was informed of Winfrey's decision earlier this week, with the announcement that she will not be seeking re-election at the upcoming annual shareholder meeting in May. While no specific reason was given for her departure, a regulatory statement from WeightWatchers clarified that it was not due to any disagreements or issues related to the company's operations, policies, or practices.

Sima Sistani, CEO of WeightWatchers, expressed admiration for Oprah's dedication as a driving force in promoting discussions on weight health for both members and society. Despite her impending departure from the board, Sistani acknowledged Oprah's continued influence and collaboration with WeightWatchers.

In addition to leaving the board, Oprah Winfrey announced plans to divest her significant ownership in the company. She stated her intention to donate all of her stock to the National Museum of African American History and Culture.

WeightWatchers shares (WW) dropped by up to 25% in premarket trading on Thursday and have since fallen by almost 70%. Oprah Winfrey's departure comes a year ahead of schedule, as she had previously signed an extension until 2025 in 2019.

In a statement, Winfrey expressed her anticipation to continue advising and collaborating with WeightWatchers and CEO Sima Sistani. She aims to help raise awareness about obesity as a chronic condition, combat stigma, and advocate for health equity.

Winfrey became a board member of WeightWatchers in 2015 and acquired a 10% ownership stake. This move brought renewed relevance to the struggling company as more individuals turned to simpler dietary approaches rather than traditional point systems.

WeightWatchers has recently encountered increased competition from GLP-1 prescription medications such as Ozempic and Wegovy, which are sometimes utilized for weight management. In response to this competition, the company introduced a new membership plan tailored for individuals using these prescription drugs. This plan grants members access to medical professionals who can prescribe the medications, along with daily nutrition plans, assistance with insurance coordination, and additional support programs for weight loss.

WeightWatchers made a $100 million-plus deal last year to acquire Sequence, a telehealth company providing virtual prescriptions for weight loss drugs when necessary. Oprah Winfrey mentioned to People Magazine in December that she has incorporated a "weight-loss medication" into her routine, without disclosing the specific drug.

Editor's P/S:

Oprah Winfrey's departure from WeightWatchers' board marks a significant turning point for the company. While the exact reasons behind her decision remain undisclosed, the timing and her divestment of her ownership stake suggest that she may have concerns about the company's future prospects. The increased competition from prescription weight loss medications like Ozempic has undoubtedly played a role in this decision, as WeightWatchers struggles to adapt to the changing landscape of weight management.

Winfrey's departure is a loss for WeightWatchers, as her presence on the board brought renewed attention to the company and her personal connection with the issue of weight loss. However, her continued commitment to promoting weight health and combating stigma is a positive sign that she will remain an influential voice in this space. WeightWatchers must now navigate this competitive landscape and find new ways to remain relevant to consumers, or risk further decline in its market share.