Democrat and Chronicle from Rochester, New York on October 20, 2015 · Page B4
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October 20, 2015

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Democrat and Chronicle from Rochester, New York · Page B4

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Rochester, New York
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Tuesday, October 20, 2015
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Page B4
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Weight Watchersmay help dieters lose weight — but the stock is fattening Oprah Winfrey’s fortune by $70 million in just a day. Just the word that Winfrey took a 10% stake in the company — buying 6.4 million shares a nd being awarded options to buy 3.5 million more — caused the stock to more than double to $13.92 a share. Winfrey was a massive winner from the one-day spike to the tune of $70 million. However, it’s just a drop in the bucket for Winfrey, who is worth an estimated $3.1 billion, according to Forbes . The massive jump is a sign of the weight Winfrey still carries with consumers. The sum’s so l arge that it would pay Winf rey’s Weight Watchers monthly membership fee of about $43 for 1.6 million months or buy her about 28 million W eight Watchers meals. While Winfrey is a huge winner from the announcement, she’s not the biggest. Half of the company’s stock, or 29.4 million shares, is owned by private investment firm Artal. That translates into a $209.9 million gain for the day. Shares of Weight Watchers had been decimated for years as the company’s business model faded amid competition and other diet options. Invest ors appear to be betting that a m arketing boost from Winfrey will reinvigorate the brand. But one-day gains just a drop in bucket Matt Krantz USA TODAY 4B E3 USA TODAY—DEMOCRATANDCHRONICLE TUESDAY,OCTOBER20,2015 MORGAN ST ANLEY’S EARNINGS PLUNGE Mor gan Stanley capped off bank earnings season with a thud — thank s to volatility that hit in August, leading to a 15% drop in trading r evenue . The inv estment bank, which makes its money on activities like trading and corporate lending, earned $1.02 billion, or 48 cents a share, in the third quarter, down from $1.65 billion, or 59 cents a share, earned last year. Morgan Stanley’s shares tumbled 4.8% to close at $32.32 Monday on the miss. NEW, BIGGER HONDA CIVIC BREAKS 40-MPG BARRIER Honda’s new Civic could light up buyer s with its improved gas mileage when it goes on sale next month. Honda r eleased details of its redesign for 2016 on Monday. The new sedan is 3 inches longer, 2 inches wider and has 3.2 cubic feet more passenger space. Yet it weighs less than the 2015 model and gets better mileage. The base model 2016 Civic will start at $19,575 including delivery, while the most expensive version goes for $27,335. APPLE 1 COMPUTER A UCTION COULD NET UP TO $800K One of the earliest Apple computers built could fetch as much as $800,000 from an online auction. The Apple 1 Computer from 1976 boasts a starting bid of about $371,000 and could potentially reach $800,000 when bidding closes Oct. 29. According to a description on Christie’s website, the offering also includes an “extremely rare” first manual Apple issued when the computers w er e released. MONEYLINE SPENCER PLATT, GETTY IMAGES HONDA JUSTIN SULLIVAN, GETTY IMAGES USA SNAPSHOTS © Holiday gift from boss Source Gyft HR Survey of 1,018 adults JAE YANG AND VERONICA BRAVO, USA TODAY The worst kind: company- branded items INDEXCLOSECHG Nasdaq composite4905.47 x 18.78 S&P 500 2 033.66 x 0 .55 T - note, 10-year yield2.02% y 0.02 Oil, light sweet crude$46.12 y 1.14 Euro (dollars per euro)$1.1328 y 0.0048 Yen per dollar 1 19.47 x 0 .10 SOURCES USA TODAYRESEARCH, MARKETWATCH.COM 17,100 17,150 17,200 17,250 17,300 17,350 DOW JONES INDUSTRIAL AVG. 14.57 9:30 a.m. 17,216 4:00 p.m. 17,231 MONDAY MARKETS NEWS MONEY AUTOS TRAVEL SPORTS LIFE United Airlines announced Monday that it would change its corporate governance process by Tuesday after the hospitalization of CEO Oscar Munoz. H enry Meyer III, the non-executive chairman of the board, offered no details on what would h appen in “the corporate governance process necessitated by the h ospitalization.” But Meyer said United’s “thoughts and well wish- e s are with Oscar.” Meanwhile, the airline has named general counsel Brett J. Hart as acting CEO. United Continental Holdings is scheduled to r eport its third-quarter earnings Thursday. T he Wall Street Journal reported Munoz suffered a heart attack. United confirmed to The Associated Press that Munoz, 56, was hospitalized Thursday after su ering a h eart attack. The company said it was too soon to know how long Munoz will need to recover. Mun oz was appointed Sept. 8 after the ouster of Je Smisek. T he shape of United’s leadership structure after his hospital- i zation is causing concern among some investors. Rather than o ering details, “United seems to be unwittingly amping up the mounting tension and concern surrounding t his already painful episode for Mr. Munoz and h is family as well as for United’s employees, customers, investors, and other stakeholders,” said Vicki Bryan, senior high yield analyst at Gimme Credit, in an investors note Mond ay. Bryan continued to give a rating of “underperform” to the air- l ine company. Still, while shares dropped roughly 3% in the wake o f the first news reports about Munoz’s hospitalization last w eek, the stock closed 1.39% higher Monday at $56.65 per share. Smisek was forced out after an internal company investigation that paralleled a criminal investigation of the Port Authority of N ew York and New Jersey, which operates Newark Liberty Intern ational Airport, a United hub. Aformer Port Authority chairman, David Samson, asked Smisek to provide flights to South Carolina, according to a report by Bloomberg News. Bloomberg recounted a dinner i n September 2011, attended by Samson and Smisek, when Samson allegedly asked that United r esume service between Newark and Columbia, S.C., which had an a irport closer to Samson’s weekend home. N o charges have been filed against Smisek. United names Hart as acting CEO Munoz’s heart attack has investors rattled Bart Jansen a nd Charisse Jones USA TODAY UNITED AIRLINES United CEO Oscar Munoz. Monday, Oprah Winfrey helped to significantly fatten up Weight Watchers International’s market value. The diet company’s stock — which had been slumping for the last few years — soared after the fi rm announced Winfrey would t ake a 10% stake. The billionaire m edia mogul, who also will re- c eive options to acquire an addi- t ional 5% stake, is joining the W eight Watchers board as well. Weight Watchers concurrently announced an expansion of its b rand beyond a pure focus on weight loss to a general emphasis on healthier, happier living. Investors sent the stock up 105% to close at $13.92 on Monday. The company’s stock had lost nearly 72% of its value in 2015 prior to the news of Winfrey’s investment being publicized. “Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for,” Winfrey said in astatement. “I believe in the program so much I decided to invest in the company and partner in its evolution.” Winfrey bought her shares at $6.79 apiece for a total investment of $43.2 million, according to a Securities and Exchange Commission filing. Analysts expect Winfrey to use the considerable in fl uence of her b rand and media presence — inc luding her well-known knack for promoting health-related initia- t ives — to drive interest in Weight W atchers meetings and products. The TV host, actor, producer and publisher “will not just bring attention to the stock, but will accelerate sales and profit recover- ies” as Weight Watchers benefits from “free publicity and media savvy,” S&P Capital IQ analyst Efraim Levy said in a research note. In addition to her role as a board member, Winfrey, who long has shown an interest in health issues and dieting programs, will serve as an adviser to the company. “Through our conversations, it b ecame clear that there is tre- m endous alignment between O prah’s intention and our miss ion,” Weight Watchers CEO Jim C hambers said in a statement. N icole Nichols, a spokeswoman for the Oprah Winfrey Network (OWN), said in an email: “ There are no current plans to promote through OWN or O Magazine , but that could change down the road.” Weight Watchers has struggled to keep up as dieting tools have increasingly gone high tech. Its total revenue fell 19% from $1.84billion in 2011 to $1.48 billion in 2014. That included declines in meeting revenue, product sales and licensing fees. About 800,000 members attended Weight Watchers meetings in 2014, down 38% from 1.3million members in 2011. The number of Weight Watchers meetings has fallen about 20% from 45,000 to 36,000 during that period. Those declines come as an increasing number of dieters count calories with smartphone apps and monitor their physical activity with high-tech devices. The c ompany, which o ers digital t ools for users, has also invested in new services such as one-on- o ne health advice delivered t hrough email, text-messaging and phone calls. In addition, it created personalized online accounts that sync with activity- tracking devices such as FitBit. JASON MERRITT Oprah’s 10% stake sends Weight Watchers stock soaring Billionaire says she will also join diet company’s board of directors Nathan Bomey @NathanBomey USA TODAY Investor Shares owned (millions) Artal 29.4 Oprah Winfrey 6.4 Fidelity 6.1 Vanguard 1.8 Capital Research and Management 1.7 Note: Winfrey shares exclude options SOURCE S&P Capital IQ, USA TODAY WEIGHT WATCHERS’ BIGGEST OWNERS Mogul fattens her fortune by $70M Oprah Winfrey bought 10% of Weight Watchers, causing its stock value to jump Monday after years of decline from its high in 2011. WEIGHT WATCHERS SURGES WITH OPRAH PURCHASE Source Bloomberg GEORGE PETRAS, USA TODAY $100 $80 $60 $40 $20 $0 20112012201320142015 $85.76 May 26 $13.92 Oct. 19

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