“Studies show some companies increase sales by up to 20 percent once they use a celebrity to endorse their product” – Ad Age.
Renowned media entrepreneur, Oprah Winfrey has caused a surge in stock value for major United States dieting company, weight watchers, with her celebrity status, as she has towed the path of Jessica Simpson and Jennifer Hudson to endorse the dieting company. The image below shows the stock quote of weight watchers on NASDAQ.
Monday was the busiest trading day of the dieting company’s history as investments closed at 105 percent at $13.92. Winfrey, who purchased 6.4 million shares and is being awarded the opportunity to buy an additional 3.5 million shares, caused the stock to leap to $13.92 a share from $6.79. While, Oprah Winfrey, aged 61, reportedly has a $3 billion net worth, she will make significant profit of almost $80 million due to the surge in investments on U.S exchanges.
According to USA Today, weight watchers have in the past, experienced a fall in investments due to alternate dieting options like wearable fitness trackers that have sprang up in recent years. However, analysts project favorable outcomes for weight watchers after Oprah Winfrey’s involvement with the brand as a major investor and board member. USA Today cites the biggest owners of weight watchers as follows: Artal: 29.4, Oprah Winfrey: 6.4, Fidelity: 6.1, Vanguard: 1.8 and Capital Research and Management: 1.7. Winfrey is the only individual on this list.
Nevertheless, here are a few black celebrities who in the past, have improved company stocks through their involvement with the companies:
Michael Jackson
Late music legend, Michael Jackson and his brothers (Jackson 5) signed a ‘first of its kind’ $5 million United States endorsement deal with Pepsi in November 1983, a year after “Thriller”. This deal was said to be a pacesetter for the advertising industry. The deal increased Pepsi sales to $7.7 billion in 1984 and an increase in market share while Coca-Cola experienced a drop in its market share. As a result of this Pepsi signed a second, $10 million global deal with Michael Jackson in support of his “Bad” album and tour from 1987 to 1988.
Michael Jordan
In 1984, basketball legend, Michael Jordan signed on as an ambassador of Nike products. Even before Jordan became a basketball mega star, Nike offered him $500,000 and his own shoe line. More than a decade later, Michael Jordan’s name and face still boosts Nike sales. According to a 2015 report by Forbes, Michael Jordan’s endorsement has aided in Nike’s sale of more than $80 million of its “Legend Blue” within its first week of its 2014 release.
Sean Combs
In 2007, American rapper, Sean Combs lent his celebrity status to Diageo’s Ciroc so as to aid an improvement in the brand’s sales. Before Combs’ involvement with the brand, Ciroc was moving cases at a rate of 120,000 per year. However, in 2009, Ciroc sales moved up to 400,000 cases. In 2011, Ciroc was set to sell more than a million cases. Analysts cite Combs’ celebrity status as the reason for the boost.
