Media titan, Oprah Winfrey announced on Monday 19th of October that she had agreed to purchase a 10% stake in Weight Watchers International and had signed a collaboration deal to promote the diet company and its services.
The single announcement caused shares of Weight Watchers to soar.
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With the stock changing valued at about $18 per share, Winfrey has single-handedly generated $700 million in stock market value in two days, given that the company has 63.6 million shares outstanding following the Winfrey deal.
Shares of Weight Watchers are up about 170% since they opened for trading on the New York Stock Exchange on Monday morning. Weight Watchers’ stock doubled in value on Monday and rose by another 30% or so on Tuesday.
Oprah Winfrey herself made major personal gains. Her 10% stake is now worth about $110 million.
In addition to the 10% stake Winfrey bought on Tuesday for $43.2 million, the company also awarded Winfrey an option to purchase 3.5 million shares for $6.79 each, which was the price the stock closed at on Friday afternoon.
Winfrey will now have to make sure Weight Watchers meets the high expectations that investors are placing on it. She can’t sell any of her Weight Watchers stock for two years and can’t unload the entire position for five years.
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