Weight Watchers International Inc. shares surged 27 percent over the past two days after Oprah Winfrey debuted a campaign endorsing the weight-loss program.
The celebrity and media mogul posted a video to her Twitter account about using Weight Watchers to lose weight. “Are you ready?” she asks in the clip. “Let’s do this together.”
?The video renewed investor optimism that Winfrey can help turn around the long-struggling company. Winfrey, 61, announced her partnership with Weight Watchers in October, saying she would buy 10 percent of the stock and join the board. The plan is for her to share her experiences using the program.
There is no better time of year to start a marketing campaign for a weight loss company and Oprah is a big draw for the demographic Weight Watchers is targeting. The problem for a weight control program is that adopting to a new way of living is exciting but quickly becomes boring. People like to try new fashionable diets so for an established brand like Weight Watchers this has been a challenge as new and younger looking operations have entered the market. The South Beach diet is one example.
This is why Oprah’s participation is a potential coup. She has often struggled with her weight and her call for people follow the regimen with her is likely to inspire a lot of New Year’s resolutions. The numbers will not show up for a few months but the share has now found support above its low and broken the medium-term downtrend. A clear move below the 200-day MA would be required to begin to question recovery potential.
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