Weight Watchers investors obsessed with Oprah

Oprah Winfrey in 96 seconds
Oprah Winfrey in 96 seconds

The New York Post -- owned by Rupert Murdoch's News Corp (NWSA). -- and Time Inc.'s (TIME) People magazine aren't as well-known for moving the stock market as their corporate cousins The Wall Street Journal and Fortune magazine.

But an item about Oprah Winfrey originally published on People's website and picked up by the Post's Page Six celebrity gossip feature appeared to help lift shares of Weight Watchers on Tuesday. (What a strange world we live in.)

People posted an item about Oprah talking about how much weight she's lost since joining Weight Watchers last year. She also is a board member of the company and owns a 10% stake in it.

Oprah told People at a premiere for the OWN Network show "Queen Sugar" that she's lost so much weight using the diet service that longtime boyfriend Stedman Graham "can pick me up and carry me to the pool. I can straddle him without breaking his back."

The Post's Page Six pounced on this important piece of market news and had a blurb with the somewhat misleading, but more salacious, headline of "Oprah can now straddle Stedman 'without breaking his back' "

Traders pounced too. Weight Watchers rose 3% Tuesday -- a down day for the overall market -- on heavier (pun intended) than average volume.

But the stock pulled back hard on Wednesday, plunging more than 5%. And this has become an all-too familiar pattern for Weight Watchers since Oprah got involved with the company.

Related: Weight Watchers still waiting for an Oprah boost

The stock soared last October after Oprah first announced she was investing in Weight Watchers. But the stock quickly gave up much of its gains once investors started to question just how much of a financial impact Oprah would have on the company.

Shares surged again in late January thanks to a tweet and video from Oprah in which she declared "Eat bread. Lose weight. Whaaatttt?" and said that she had already lost 26 pounds.

But investors got a rude awakening a month later when Weight Watchers reported a surprise quarterly loss as well as a decline in sales, subscribers and attendance at the company's meetings.

The stock is now down more than 50% this year -- a reflection of the fact that Weight Watchers continues to face major challenges.

For one, there's competition from Nutrisystem (NTRI), whose stock is actually up 32% this year. Nutrisystem's CEO told CNN in early January that the company did not see any negative impact to its business after Oprah bought her Weight Watchers stake.

And many people interested in losing weight and staying fit are also able to do so for free thanks to numerous diet and exercise mobile apps.

Oprah is rich and powerful. And apparently she's also now thinner and more agile. That may mean more pool-side frolicking and fewer trips to the chiropractor for Stedman ... but it's not a reason to buy Weight Watchers stock.

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