The FINANCIAL — On October 19, billionaire media icon Oprah Winfrey has bought a 10% stake in popular dieting company Weight Watchers International which sent the company’s stock rocketing during morning trading. As of 11:09 AM ET, Weight Watchers was up 88.22%, or $5.99, resting at $12.78 per share.
Winfrey is also receiving options to acquire an additional 5% stake in the company for $6.97 per share, according to Nasdaq.
In additional to a sizable investment, Winfrey will join Weight Watchers’ Board of Directors and serve as an adviser to the company. Her positive personal experience with the company’s weight loss program led to her eventual investment.
In a statement, Winfrey said “Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for. I believe in the program so much I decided to invest in the company and partner in its evolution.”
“Through our conversations, it became clear that there is tremendous alignment between Oprah’s intention and our mission,” Weight Watchers CEO Jim Chambers said in another statement. “We believe that her remarkable ability to connect and inspire people to realize their full potential is uniquely complementary to our powerful community, extraordinary coaches and proven approach.”
According to term deals filed with the Securities and Exchange Commission, Winfrey will not be able to sell any of her Weight Watchers stock for the first two years of her investment. In the third year, however, she can sell up to 15%; in the fourth year she can sell up to 30%; in the fifth year she can sell up to 60%; and after five full years of her initial acquired stake in Weight Watchers, Winfrey has the right to sell all of her shares.
Investors should not be surprised if Weight Watchers continues to rise throughout the day October 19.