Weight Watchers Stock Pulls Back After Buyout Boom

WW soared after news that the company will acquire telehealth provider Sequence

Deputy Editor
Mar 8, 2023 at 3:12 PM
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WW International Inc (NASDAQ:WW), formerly known as Weight Watchers International, received plenty of attention yesterday after announcing the acquisition of telehealth provider Sequence. This will enter the company into the prescription drug weight loss business, as Sequence offers users access to drugs that suppress appetite, including brand names Ozempic, Wegovy, and Trulicity, which are used to treat diabetes and obesity. 

WW surged 79.1% after the news yesterday, but is staging a bit of a correction today , down 18.5% to trade at $5.65 at last glance.  A downgrade from Craig-Hallum to "sell" from "hold" is weighing on the stock as well, though D.A. Davidson threw in a price-target hike to $9 from $6.

It will be interesting to see if the 200-day moving average steps up as support with this new technical picture. Year-to-date, the WW is down 49.4%, and on the short sell restricted (SSR) list amid the volatility.

WW Mar8

A short squeeze could keep the wind at the equity's back. Short interest represents a healthy 11.6% of the stock's available float, and it would take over five days to buy back these bearish bets, at WW's average pace of trading. 

 

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