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Why Weight Watchers International, Inc. Spiked Today

A pair of feet on a scale with a measuring tape in front of it

What happened

Shares of Weight Watchers International, Inc. (NYSE: WTW) were up today after Oprah Winfrey gave a rousing speech at last night's Golden Globe Awards. The speech led to speculation that she may run for president, which boosted shares of the weight-loss specialist, as Winfrey owns a stake in the company and is seen as the face of the brand.

As of 11:50 a.m. EST Monday, the stock was up 13.5%.

A pair of feet on a scale with a measuring tape in front of it

Image source: Getty Images.

So what

The logic in Winfrey's speech pushing the stock higher is a little convoluted, but seems to be that since Winfrey is essentially the face of the brand, if her exposure and popularity increase, it should result in a brand halo for Weight Watchers, leading to an increase in subscriptions and profits.

Though Winfrey continues to deny plans for presidential aspirations, the speech, which came as she accepted the Cecil B. DeMille lifetime achievement award, fueled rumors that she would run, as did a CNN report quoting two close friends who said she was actively thinking about campaigning for the highest office in the land.

Now what

Weight Watchers shares have soared since Winfrey first took a 10% stake in the company and joined the board of directors in 2015, and the stock nearly quadrupled last year on strong subscription and profit growth. The media mogul has star power that few others can match, especially with middle-aged women who make up Weight Watchers' target audience. Whether increased attention on her would help Weight Watchers' business is unclear, but at this point the stock has been such a big winner that even a minor piece of news can send it surging.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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