Oprah Winfrey buys 10% shares in Weight Watchers (Photo : Christopher Polk/Getty Images )
The stocks of New York-based Weight Watchers soared by 70% on Monday after billionaire Oprah Winfrey offered to buy 6.4 million shares of common stock for $43.2 million - representing 10% of the company, with an option to buy 3.5 million shares more at any other time.
Businesswoman and investor Winfrey also joined the board of Weight Watchers.
Weight Watchers provides weight-loss services to overweight people through diet and exercise, and the company explores online and group programs to achieve its business objectives.
According to a filing with the Securities and Exchange Commission, Winfrey will promote the services and ideals of Weight Watchers with her name and face for five years - and she will never endorse any other weight-loss products within this period. And to drive home this point, Winfrey's photo has already been added to the homepage of Weight Watcher's website.
Considering the fact that the weight-loss company has been faced with steady sales decline over a few years, and edged in by stiff competition from other companies that promote fitness tracking devices and weight-loss mobile apps among others - the company's stocks slumped by 73% from the beginning of this year up to last Friday, and most investors had been tempted to eight sell or hold their stocks.
Although music artistes Jennifer Hudson and Jessica Simpson had appeared in Weight Watchers' commercials and even served as spokeswoman for the company, Oprah's openness about her weight loss endeavors over the years would lend credibility to the company's business.
Winfrey listed undergarment maker Spanx as one of her annual favorite companies in 2000, and the almost unknown undergarment made by the company to make women look slimmer shot to national limelight almost instantly, shooting the Spanx to national fame and sustained profits.
This could hopefully happen again with Weight Watchers.
