WW International (WW), which operates weight loss brand WeightWatchers, has filed for Chapter 11 bankruptcy. However, the company won’t be closing its doors to customers and expects to exit the bankruptcy process within 45 days. It also plans to remain publicly traded after the bankruptcy is complete.
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WeightWatchers’ bankruptcy filing is part of a larger agreement to reduce its massive debt. Through this process, the company will shed $1.15 billion of debt thanks to agreements with holders of 72% of its outstanding principal amount, term loan facility, revolving credit facility, and 4.5% senior secured notes.
WeightWatchers CEO Tara Comonte said the bankruptcy filing will “give us the flexibility to accelerate innovation, reinvest in our members, and lead with authority in a rapidly evolving weight management landscape.”
WW Stock Movement Today
While Comonte is optimistic about WeightWatchers’ future, it’s investors aren’t pleased about the bankruptcy filing. Shares of WW stock took a hefty 52.96% beating in pre-market trading today. Traders will note that WeightWatchers shares were struggling well before the bankruptcy filing, with a 37.8% drop year-to-date and a 58.2% decline over the last 52 weeks.
WeightWatchers has struggled to maintain interest as demand for its services falls in a post-GLP-1 world. The company prefers a more holistic approach to weight loss, but eventually gave in and started offering GLP-1 drugs through its telehealth services. Other recent issues include the departure of former CEO Sima Sistani last year, when shares were falling, and Oprah Winfrey leaving its Board of Directors.
Is WW Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for WeightWatchers is Hold, based on two Hold ratings over the last three months. With that comes an average price target of $1.10, representing a potential 39.24% upside for WW stock. These ratings and price targets will likely change as analysts react to the bankruptcy filing.
