The CEO at WW Worldwide, often known as WeightWatchers, instructed staff in a memo right now that the corporate is on monitor to beat its beforehand provided first quarter steering and recommended that staff disregard “breathless media coverage” and that the corporate’s inventory value would “take care of itself.”
The battered inventory dropped one other 20% right now to $1.87 and is down 78% 12 months up to now. Two weeks in the past, the corporate introduced that its star board member and longtime investor Oprah Winfrey would depart the corporate’s board in Might and donate her stake within the firm. Winfrey, like 9 million other Americans, stated this 12 months that she is utilizing weight-loss remedy. Winfrey joined the board in 2015 after investing $43 million within the firm and agreeing to permit WeightWatchers to make use of her identify and picture in its advertising. In line with the corporate’s disclosures, Winfrey wasn’t alleged to let any firm however WeightWatchers use her identify, likeness, and endorsement in reference to some other weight reduction or weight administration packages. She was additionally to not have interaction in some other “weight loss or weight management business, program, products or services during the strategic term and for one year thereafter.”
In a memo right now, CEO Sima Sistani stated the inventory value doesn’t replicate the corporate’s efficiency and that tradeoffs made within the close to time period would repay in the way in which of future development. She additionally famous that the corporate’s long-term debt agreements wouldn’t mature till 2028 and 2029, which provides WeightWatchers “ample time” to finish a turnaround. The corporate has gotten itself into the weight-loss meds business, buying telehealth platform Sequence final 12 months for $132 million.
“Turning around and totally transforming a business is not for the faint of heart!” stated Sistani in her memo. “Again, I know clickbait stories and their predictable, albeit temporary, market impact don’t feel great. But take pride, because we will prove the naysayers wrong.”
The memo got here on the heels of news that the non-public fairness agency managed by former chairman Ray Debbane, who resigned in March 2023, had made $4.8 billion over 23 years by promoting the inventory at $7.15 per share when Debbane exited. Marketwatch famous that WeightWatchers had tapped stars over time together with Charles Barkley, Jessica Simpson, James Corden, Jenny McCarthy and Jennifer Hudson in a bid to lure dieters to the corporate’s choices.
Information also broke this week that lenders had employed legal professionals to barter debt with WeightWatchers.
Sistani tried to move that off along with her word to staff right now.
“As the week draws to a close, I want to take a moment to address some of the breathless media coverage that I’m sure many of you have seen,” she stated. “We have strong liquidity and are not in a cash crunch.”
“These headlines are often just speculation.”
