Nu Skin Plunges on China Pyramid Suspicions

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Jan. 16 (Bloomberg) -- Nu Skin, a maker of skin-care and nutritional products, plunged the most in more than nine years after the Chinese government said it would investigate the company. Yesterday a Chinese newspaper called Nu Skin a “suspected illegal pyramid scheme.” Olivia Sterns reports on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Shares in new skin are down and the stock has been halted in trading twice.

This follows allegations coming from a chinese newspaper saying new skin has been suspected of an illegal pyramid game.

This is a company that makes nutritional and skin ruddock's and the government says they are investigating these allegations.

New skin has been on a tear recently, the stock quadrupled last year.

New skin denies these allegations, but this calls to mind another herbal nutritional supplement company that has been accused of operating a pyramid game -- herbalife.

Herbalife shares are down 10%. blackmun is calling it a pyramid scheme.

It's interesting to see what analysts reaction has been.

One has cut the recommendation to a hold, saying the chinese market is large enough that this could significantly impact their sales.

New skin gets about 20% of their sales of china.

Bank and wedbush are taking another town, maintaining a bite on the stop and bank of america says network marketers like new skin have always been questioned.

There does not seem to be tangible evidence to validate these negative claims.

They say the selloff is basically unwarranted and face similar allegations.

What happens at the government level?

When does the commerce department get involved?

It's hard to say.

I think it's too hard to say -- there are reports saying they suspect new skin of a pyramid scheme.

Thank you as always.

Joining us from the breaking news -- you saw the 33% intraday

This text has been automatically generated. It may not be 100% accurate.


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