Weight Watchers International (NASDAQ:WW) shares plunged 43% to $0.45 as it struck a deal for a "pre-packaged" Chapter 11 bankruptcy, aiming to clear $1.15 billion of debt off its balance sheet.
The company, officially known as WW International, has cut a deal with a group of lenders and bondholders holding around 72% of its debt, with the process expected to zip through the courts in around 45 days.
The New York-based company insisted the move is about emerging stronger, while allowing it to keep running its weight loss programs without interruption for its three million members.
Suppliers, employees, and other unsecured creditors will all be paid in full, it said.
CEO Tara Comonte framed the move as a way to gain "flexibility to accelerate innovation" while focusing on digital services and telehealth, a segment that delivered a 57% revenue boost in Q1 2025.
If all goes to plan, the lenders will swap their debt for $465 million in new senior secured debt and 91% of the restructured company's common stock. Existing shareholders will be left with just 9% — and that’s subject to dilution.