Oprah lost 26 pounds ... Weight Watchers stock soars

Oprah drops pounds, Weight Watchers stock gains

Oprah Winfrey still has the Midas Touch for Weight Watchers.

Oprah, an investor in Weight Watchers as well as a member of the company's board and diet service, said in a video she posted to Twitter Tuesday afternoon that she has already lost 26 pounds using Weight Watchers.

And she did it despite eating bread every single day.

"I love bread!" she said (quite emphatically) in the video. The text of the tweet? "Eat bread. Lose weight. Whaaatttt?"

Shares of Weight Watchers (WTW) soared more than 20% following that revelation. Three cheers for gluten ... if not subtlety.

But will the latest Oprah rally last?

Weight Watchers has been an incredibly volatile stock since Oprah took a 10% stake in the company back in October.

Shares were trading for less than $7 before the Oprah announcement and immediately more than doubled to above $15 on news of her investment.

The stock went as high as $28 by November but has since cooled off to around $13. That includes Tuesday's pop.

Weight Watchers CEO Jim Chambers said back in November (when the company last reported earnings) that it did notice a big increase in the number of visitors to its web site, thanks to Oprah.

But since then, some investors have wondered if Oprah's involvement with the company will really lead to an increase in paying members.

Weight Watchers has been hurt during the past few years by the increased popularity of free diet apps and fitness trackers available on smartphones.

There was also a mini social media controversy about one of the TV ads featuring Oprah that started airing last month.

Related: Maybe Oprah won't save Weight Watchers after all?

In one of those spots, Oprah says that "inside every overweight woman is a woman she knows she can be."

Some women voiced their displeasure with that line on Twitter, saying that they don't need to lose weight to be the woman they want to be.

But investors weren't focusing on that Tuesday.

It's also important to remember that Weight Watchers is a stock that many short sellers are betting against. Short sellers borrow a stock and sell it. They then hope to buy it back at a lower price and pocket the difference.

The risk with shorting a stock though is that any bit of good news -- such as the suddenly slimmer waistline for a diet company's celebrity spokesperson/owner/media mogul -- could cause a big spike in the stock as shorts try to avoid big losses.

So this so-called short squeeze was probably playing a role in Weight Watcher's huge move Tuesday.

The company's market value rose by nearly $150 million after Oprah's tweet -- a little more than $5.6 million for each pound she lost.

Mangia! Pass the bread. Although maybe not the butter?

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