(Reuters) -Shares of WW International, also known as WeightWatchers, took a pounding on Thursday as the company disclosed that celebrity shareholder Oprah Winfrey would exit its board later this year and donate her stock in the weight management firm.
The exit of the media icon, who has been a board member since 2015, comes at a time when WW is struggling to turn a profit. The stock fell nearly 23.2% to $2.93 in early trading and has more lost more than half its value so far this year.
Winfrey will donate her WW shares to the National Museum of African American History and Culture, WW said.
She owned 1.13 million shares worth $6.34 million as of Jan. 1, LSEG data showed.
Winfrey’s donation would help “eliminate any perceived conflict of interest around her taking weight loss medications,” the weight-loss services firm said on late Wednesday.
The talk show host said last year that she uses prescription medication to manage her weight.
Shares of the New York City-based company have also been hurt due to “exacerbated concerns” around its growth prospects and liquidity, Barclays analyst Stephanie Davis said.
The stock had more than doubled in value last year on hopes for a boost from its acquisition of telehealth platform Sequence, which marked its entry into the lucrative market for prescription obesity drugs, offered by Novo Nordisk and Eli Lilly.
But the company’s 2024 sales forecast of $830 million to $860 million – which came in below analyst expectations of $896.2 million – somewhat dashed those hopes.
WW International has a lower forward price-to-earnings multiple – a common benchmark to value stocks – of 13.55 compared with 17.21 for rival USANA Health.
(Reporting by Bhanvi Satija and Medha Singh in Bengaluru; Editing by Shinjini Ganguli)
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