What happened
Shares of WW International (WW 10.06%), the company formerly known as Weight Watchers, were moving higher today, seemingly in response to a Wall Street Journal report that detailed the company's efforts to tie its future to weight loss drugs like Ozempic, which are currently exploding in popularity.
As a result, WW stock was up 13.2% as of 10:33 a.m. ET.
Image source: Getty Images.
So what
Forced to compete with popular weight loss drugs, Weight Watchers is changing its tack, no longer focusing as much on its points-tracking system, which CEO Sima Sistani said introduced shame into dieting and weight loss.
The company spent $106 million to acquire a telehealth company, Sequence, so that it can prescribe weight loss drugs, and is moving away from its earlier approach to weight loss.
Oprah Winfrey, a WW board member and an icon for many of the company's members, walked back earlier comments calling the weight loss drugs "an easy way out," which led WW stock to fall double digits on Sept. 21. Winfrey told the Journal, "I believe that prescription medications are an important and viable option to consider for people who struggle with weight and health-related issues."
That news seemed to give the stock a boost today as D.A. Davidson put out a note saying it could push the stock higher.
Winfrey also purchased nearly 4,000 shares of WW stock last week, and there are some signs that WW is seeing benefits from the Ozempic boom. Membership was up sequentially in the second quarter to 4.1 million, bucking the traditional decline that follows New Year's resolutions.
Now what
Ozempic is shaking up a wide range of stock market sectors, and food and beverage stocks recently fell after a Walmart exec said the drug was beginning to have an impact on grocery sales.
WW stock has been highly volatile in recent years, but if the weight loss company can tie itself to the Ozempic boom, the stock is likely to benefit.
Additionally, Winfrey's reengagement with WW is likely to benefit the company. Keep an eye on the membership trends as the stock should move higher if membership continues to grow sequentially.
