Weight Watchers’ shares spiked 18 percent on Friday — and Oprah didn’t even open her mouth.
The stock (symbol: WTW), which has yo-yoed like Oprah’s weight since the former talk show queen became a big investor and the public face of the brand, surged on the news that Weight Watchers is targeting a new population of dieters — the 86 million Americans with prediabetes — with a tailor-made program.
The company couched the news as a medical study showing that its Weight Watchers Diabetes Prevention Program is very effective in helping this group lose weight and keep it off. The promising results sent the stock up more than 18 percent, to close at $14.89 on Friday.
Investors were so hungry for good news that perhaps they didn’t read to the bottom of the release. That’s where Weight Watchers revealed that it had funded the study conducted by the Indiana University School of Medicine and published in the American Journal of Public Health.
While it is not uncommon for private industry to fund research that produces affirming results, “it doesn’t mean that it’s good scientific practice,” said Harvard Medical School professor David Ludwig, who is also director of the New Balance Foundation Obesity Prevention Center.
“We found that if a food company sponsored a research study, the outcomes were four to eight times more likely to be more favorable to that company’s interests than if the study was independently funded,” Ludwig said.
The Indiana University research was conducted in 2013 and 2014, involving 225 people, mostly women, who had prediabetes.
‘The findings suggest that Weight Watchers…could significantly expand access to effective diabetes prevention programs.’
- Dr. David Marrero, lead investigator
Some of the participants used Weight Watchers’ program and others used a “self-initiated” program using supplemental counseling materials. The Weight Watchers dieters lost 5.5 percent of their body weight after six months and kept it off after 12 months, while the other group lost only 0.8 percent of their body weight and regained some of the pounds after 12 months.
“The findings suggest that Weight Watchers, a widely available, empirically validated weight management program, could significantly expand access to effective diabetes prevention programs,” the lead investigator of the study, Dr. David Marrero, said in a statement on Thursday.
Ludwig was more skeptical. “If you just look at the funding, you can make a very good guess as to what the study will show without reading anything else,” he said.
Participants were offered several “modest gift certificates, valued at $10” for each of their visits to the research center, Weight Watchers said.
In the past, such stock swings were caused by the latest tweets and Facebook postings from Oprah about her progress shedding pounds with Weight Watchers.
The media mogul took a 10 percent stake in the company in October and agreed to share her experience on the program.
After she disclosed her investment, the stock went on a massive tear for a couple of months — only to shed much of that gain in the new year.
The stock skyrocketed again last month, gaining nearly 20 percent, when she tweeted that she had lost 26 pounds on the program.