KEY TAKEAWAYS
- WW International shares tumbled Wednesday after the company, better known as WeightWatchers, filed for Chapter 11 bankruptcy protection to cut $1.15 billion in debt.
- The 62-year-old weight-loss company said the bankruptcy filing would position it to undergo its restructuring plan to focus on its digital operations and expand its telehealth business.
- The company’s stock was down more than 40% in recent trading, and has lost close to two-thirds of its value since the start of the year.
WW International (WW) shares plunged Wednesday, a day after the company, better known as WeightWatchers, said it filed for Chapter 11 bankruptcy protection to cut $1.15 billion in debt.
The 62-year-old weight-loss company said the move would position it to undergo its restructuring plan to focus on its digital operations and expand its telehealth business. It said the telehealth business saw first-quarter revenue growth jump 57% year-over-year.
“The decisive actions we’re taking today, with the overwhelming support of our lenders and noteholders, will give us the flexibility to accelerate innovation, reinvest in our members, and lead with authority in a rapidly evolving weight management landscape,” WeightWatchers CEO Tara Comonte said.
In February, S&P Global downgraded WW International’s credit rating after the company said it had drawn down the full $175 million of a revolving credit facility, which the ratings agency said “signals the company is in financial distress.”
The company’s stock was down more than 40% in recent trading and has lost close to two-thirds of its value since the start of the year. Its shares have been struggling as the success of weight-loss drugs such as Novo Nordisk’s (NVO) Wegovy and Eli Lilly’s (LLY) Zepbound cut into demand for the company’s services.
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