Oprah Winfrey to go on a Diet After Turning This Failing Company Back up on its Feet!

Oprah Winfrey to go on a Diet After Turning This Failing Company Back up on its Feet!

I literally almost began to cry yesterday after learning just how stupid-easy it is for a celebrity brand to make truckloads of cash (or really, gold bullion in this case) in a single fell swoop.

Just as Weight Watchers was looking like it would never find its way out of the ever-deepening abyss it’s been sinking into for the last decade or so, in swoops the biggest brand of the millennium to save them. Enter Oprah Winfrey, with her $3-million dollar net worth and untold mega-billion dollar name which apparently can literally double the price of a failing stock in the space of a single trading day!

What’s Oprah’s formula? Heck if I know!

On Monday October 19, Weight Watchers (stock symbol: WTW) announced that the Harpo Productions founder would be joining their board of directors, as well as purchasing a 10% stake in the company. By end of day, the once mega-giant diet franchise watched their stock go from $6.79 at the opening bell to $13.92 by end of day.

Now, let’s forget about the Warren Buffett’s and George Soro’s of the world for a second; those guys know how to print money, no doubt. This small feat, that took shape in less than an 8-hour span, represented close to a $72-million influx to the Weight Watchers brand!

Check out the current numbers on MSN Money. As of this post, WTW is making a steady run to break the $20 per share mark and is hovering around $18.30. And we’re not even 4 hours into trading yet!

According to a Securities & Exchange Commission statement, Weight Watchers also agreed to sell 6.36 million shares to Winfrey for $6.79 each, at a mere $43.2 million. In addition, the company granted Winfrey an option to purchase another 3.5 million shares for $6.79 each. That stock is now worth $116, 388,000 as of 10:32 (EST) on Tuesday, October, 20.

Image Credit: Mike Mozart/Flickr
Image Credit: Mike Mozart/Flickr

Obviously, this is one of the most lucrative deals the billionairess has ever made. In exchange for the gift of life she’s brought to the company, and the untold millions she’ll undoubtedly make just on the stock purchase deal alone, Winfrey has agreed to stick by the brand for the next five years. She’ll obviously go on another weight loss kick and use their products to slim down, which represents a little physical labor and mental discipline on her part, but essentially this is some of the easiest money the entrepreneur has ever made.

Oprah shared her love for the company in this statement:

“Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for,” Winfrey said in a statement. “I believe in the program so much I decided to invest in the company and partner in its evolution.”

Winfrey, who is worth an estimated $3 billion, is partnering with an on-the-low-down private equity mogul named Ray Debbane, who is based in New York and has controlled Weight Watchers since 1999, when the Manhattan investment firm he manages bought Weight Watchers in a leveraged buyout. Debbane’s Invus Group, which manages money for a few wealthy European families, has made at least $3.8 billion off of Weight Watchers over the years by selling the company’s stock and assets, and collecting dividends.

“Weight Watchers and Oprah Winfrey make a powerful combination,” Debbane said in a statement on Monday. “Oprah is a force of nature.”

So strange they still find themselves in trouble with the untold amount in marketing funds the investment firm surely must have had on hand. With celebs like Charles Barkley and Jessica Simpson promoting the brand, it’s hard to put a finger on what exactly caused their value to plummet. More than likely because there’s so much competition in this space and the company can no longer ride on the same laurels it once back in the pre-2000’s when advertising dollars and celebrity endorsements (along with limitless marketing cash) were all a big weight loss brand needed to keep their name entrenched in the minds of the millions suffering from body-image issues.

Now to the lowdown on this situation:

I want to get your opinion: Do you think this promising, almost out-of-control raise in stock value will actually save Weight Watchers in the coming years?

I’m not convinced. Once the heat wears off a bit, I wonder if the public will actually respond to this as they did when Oprah decided to endorse Tony Robbins, Dr. Phil, Dr. Oz, etc.?

Sure, everything the greatest female entrepreneur of the century touches magically transforms into pools of cash, but can she save them with so much competition and Internet noise backing so many endless and highly marketable weight loss solutions?

Personally, I think it’s nothing more than a fad diet, with most of the suggested meals being high-carb and not terribly nutritious. They’re currently nothing more than an expensive and glorified weight loss mentor, and there are plenty of those on every street corner and countless YouTube channels.

What I wouldn’t give to have had the opportunity to sink every dollar I have into WTW at $6.79 before it blew up!

Share your thoughts…

Oprah Quote

Main Image Credit: Alan Light/Flickr

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