Weight Watchers International Inc (NYSE:WTW) needs to wake up and buy Fitbit Inc (NYSE:FIT). This makes huge sense and allows Weight Watchers the perfect opportunity to leverage its high stock price to make huge gains in the fitness and wearable industry and inroads with millennials. This makes so much sense, I am surprised CEO Nicholas P. Hotchkin of Weight Watchers has not acted. Let's discuss why the joining of these two companies would be ideal. First, Weight Watchers International is a company that is trying to re-invent itself to millennials. Millennials do not do the whole 'weight watchers diet' thing.
It is not cool and no 22 year old is telling their friends how they are on weight watchers. Oprah Winfrey gave Weight Watchers a major boost a couple years ago when she joined the company but she is not a millennial favorite either. The company is in major need of a refresh. Just this week, the company made its first move when they signed DJ Khaled. This is a great first step but they need to do more. One way to do more would be to buy Fitbit Inc. Trading near 52 week lows and with over $650 million in cash on the balance sheet it makes sense from a financial standpoint. It also makes sense from a reinvention standpoint. Think about it like this, imagine if Weight Watchers could incorporate the fitness trackers into their Weight Watchers diet program.
Tracking heart rate and fitness along with diet makes sense. In addition, it makes weight watchers 'cool' again. I have a vision of the wearable/app allowing the tracking of the diet/points as well as fitness and other metrics. The synergy could even create competition between Weight Watchers and Apple Inc (NASDAQ:AAPL) on the wearable front. Ultimately, Weight Watchers needs to do something in 2018 to get into the younger generations. Buying Fitbit would be a huge step in the right direction.
Note: I have no position in either Weight Watchers or Fitbit and do not plan on buying either.
