Nu Skin seems to be in trouble. At least going by articles on sites like Seeking Alpha. Recently we've seen:
Is Nu Skin Insolvent?
Skeletons In Plain Sight And Why Nu Skin Is Worth $10/Share
Nu Skin's Accounting: More Red Flags
Nu Skin has China syndrome as business falters
... and plenty of others.
When you consider that the share price of Nu Skin (NYSE:NUS) dropped from the January 2014 peak of $140 to a new 52 week low of near $40 in 8 months, yeah, you would think they might be a tad worried out there in Salt Lake City.
I like to think too that Diederik Van Nederveen had a small part in waking analysts up to the scam those Mormons were running in SLC.
The tip of the iceberg (in China) was the fine of $540,000 for selling products via direct selling that had only been approved for sale in retail stores, and for making claims about various products without sufficient proof. Now we learn they have more problems in China. From Shanghai Daily:
Nu Skin wasn't mentioned in the investigation, to be fair. But people are waking up to these MLM scams over there. Could that be why Fortune reports that...Sep 02,2014
BEIJING, Sept. 2 (Xinhua) -- A five-month crackdown on pyramid schemes led to millions of yuan seized and thousands of arrests, the State Administration for Industry and Commerce (SAIC) said on Tuesday.
The campaign, carried out by the SAIC, the Ministry of Public Security and other authorities from March to July, cracked 1,446 pyramid schemes involving 3.7 billion yuan (606.8 million U.S. dollars).
A total of 3,911 people are being investigated and 64.4 million yuan has been seized.
The crackdown busted a number of major pyramid schemes with severe punishments delivered to core participants, the SAIC said.
... "the number of active reps fell 32%"... Wow! Talk about being between a rock and a hard place. Nu Skin has run out of victims to sucker into their "opportunity" here in North America. So they move to the Far East to look for new suckers, and what happens? The pesky Chinese government starts meddling in their affairs.Nu Skin, NUS -3.99% best known for its anti-wrinkle products, is similarly discovering China is a tough slog. Its shares took a beating (down 16% at last count) on Wednesday after it reported a huge drop in sales in greater China, its biggest market, and costs jumped. In that market, second-quarter revenue fell 12% to $229.9 million, while more ominously, the number of active reps fell 32%. The reps count is a leading indicator of sales because in direct-selling business, you don’t sell products without sales reps.
So how does Nu Skin respond to a 32% drop in their sales force?
Nu Skin UAE.jpgNu Skin China plans to fly 14,500 employees to Dubai for a corporate jaunt costing “hundreds of millions of dollars” – just two weeks after Chinese authorities hit the company with a fine of more than US$500,000.
Embarking on the largest corporate holiday ever held in the UAE, Nu Skin’s beauty product sales stars will pack jumbo jets, hotels and restaurants as they tour the country from Abu Dhabi to Sharjah for 10 days.
Read more: Embattled Nu Skin China to embark on massive corporate jaunt to UAE | The National
Nu Skin sales people tour the Emirates. Courtesy Nu Skin