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Investing.com -- Shares of WW International (NASDAQ:WW) dropped 4.7% as the company is reportedly preparing to file for bankruptcy. Bloomberg, citing sources familiar with the matter, indicated that WW International, known for its weight-loss programs and products, is negotiating a debt-restructuring deal with a majority of its lenders.
The once-dominant brand in the diet industry, WW International, has been weighed down by approximately $1.5 billion in debt, while facing declining revenue and competition from new weight-loss drugs such as Ozempic. The planned bankruptcy filing, which is expected to occur within weeks, aims to be a pre-packaged process to facilitate a swift Chapter 11 exit, ensuring that day-to-day operations continue unaffected.
Despite the impending bankruptcy, the company plans to remain publicly traded, with operations ongoing throughout the restructuring process. However, it is important to note that details of the bankruptcy plan are still subject to change. WW International has engaged PJT Partners Inc (NYSE:PJT). for advisory services during this period.
The news has understandably troubled investors, leading to a notable decline in the company’s stock price. The market’s reaction reflects concerns over the financial stability and future prospects of WW International as it works through its significant debt challenges.
This development underscores the broader struggles within the diet and weight-loss industry, which has seen a shift in consumer preferences and the rise of pharmaceutical alternatives to traditional diet plans and products. As WW International navigates through these restructuring efforts, the market will be closely watching for further updates on the company’s financial health and strategic direction.
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