Oprah Winfrey's halo effect on Weight Watchers (WTW) is disappearing fast.
The media mogul and 10% owner of Weight Watchers has seen $117 million in wealth vanish as shares of the company have crashed 66% from their high notched November 2015 on enthusiasm over her involvement with the company. Shares of Weight Watchers are down another 68 cents, or 6.6%, to $9.68 Tuesday after the company said it is replacing its CEO. The value of the company has dropped $1.2 billion in value since the peak hit after Winfrey came on board.
Reality is setting now as things haven't worked out as many investors hoped after Winfrey formed close professional ties with the company in October 2015. The stock is still above the $6.79 a share it traded for before Winfrey took her stake and became the third largest investor. But the level of enthusiasm is proving in hindsight to have been overdone. The company's revenue during the just completed second-quarter of $309.8 million is flat with a year ago, although profit is up 9.3%. The company lost $10.8 million in the first quarter.
Winfrey is now using her position on the board to push for management changes. Late Monday, the company said it will replace CEO of three years as of Sept. 30, James Chambers, who is the same chief executive running the company when Winfrey joined.