Weight Watchers has received another strong vote of confidence. Billionaire Steve Cohen’s family office Point72 Asset Management has taken a 6% stake in the struggling company, according to a filing with the Securities and Exchange Commission. That stake of about 3.8 million shares gives Cohen the distinction of being one of Weight Watchers’ largest shareholders.

 

Weight watchers WTW
Chart via S&P CapIQ

Cohen joins Oprah in Weight Watchers

Talk show diva Oprah Winfrey said she bought a stake in Weight Watchers last month and that she will use her celebrity status to give the company a boost. She forked over $43 million to take a 10% stake in the company, and shares skyrocketed as a result, climbing by more than 200% to add around $1 billion to its stock market valuation, notes Forbes staff writer Nathan Vardi.

Apparently Cohen thinks Winfrey has significant potential to turn Weight Watchers around, as his position followers her involvement in the company. Historically, the company has had mixed success with celebrity campaigns, but Winfrey brings with her a level of power few other celebrities can offer because of her ownership and involvement in multiple media outlets.

Weight Watchers beats estimates

Last week Weight Watchers surprised Wall Street with earnings that are better than expected. The company reported 39 cents per share in earnings and $273.3 million in revenue. Analysts had been expecting 29 cents per share in earnings and $266.5 million in revenue. In addition to beating expectations, the company also upped its guidance for the year from a range of 57 cents to 72 cents per share to a range of 64 cents to 74 cents per share.

Weight Watchers shares climbed by more than 1% to $23.14 per share during regular trading hours today. The stock has probably been experiencing a short squeeze as it was a very popular short position before Winfrey announced her involvement. As of the middle of October, short interest was at about 15.8 million shares, and the number of days to cover was at 20.7.

At that time, the average daily share volume was at around 767,000, but that metric has since climbed to 7.8 million. It continues to rise, as today more than 10 million shares of Weight Watchers changed hands.