Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Shares of Nu Skin Enterprises Dropped Again

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Nu Skin Enterprises (NYSE: NUS  ) were tanking for the second day in a row today, falling 26% after the Chinese government said it would begin an investigation into the company.

So what: Following a report alleging that the multi-level marketer of skin care product was "an illegal pyramid scheme," the Chinese government ordered local authorities to look into allegations that Nu Skin distributes false information and conducts illegal business in China. After falling as low as $67.51, shares recovered in the afternoon, closing at $84.80, after management once again came to the company's defense. Today, the company reaffirmed its commitment to complying with all local laws, saying, "We have initiated our own province-by-province review and invite relevant regulators to provide guidance."

Now what: Considering, that greater China provided half of Nu Skin's sales in its most recent quarter, the threat of getting booted from the country is certainly a serious one. However, these are just allegations at this point, and Nu Skin's response is perfectly reasonable and more convincing than a government that's accusing the company of "brainwashing" trainees. China is often a cryptic fog to the investment world, as this case perfectly illustrates. However, sending the stock down 40% in just two days seems like an overreaction.

The right move to make in China
U.S. automakers boomed after WWII, but the coming boom in the Chinese auto market will put that surge to shame! As Chinese consumers grow richer, savvy investors can take advantage of this once-in-a-lifetime opportunity with the help from this brand-new Motley Fool report that identifies two automakers to buy for a surging Chinese market. It's completely free -- just click here to gain access.

Read/Post Comments (2) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 17, 2014, at 8:20 AM, AFMS wrote:

    China the the fake making nation lol.. are they serious.. who cares what those creeps think maybe its all the smog they created is clouding there minds. Polluting, tech stealing, counter fitting, animal abusing... etccc

  • Report this Comment On January 17, 2014, at 10:36 AM, details wrote:

    i believe there is a difference b/w a probe and an investigation, correct?

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2798839, ~/Articles/ArticleHandler.aspx, 8/31/2015 11:49:05 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

Today's Market

updated Moments ago Sponsored by:
DOW 16,541.19 -101.82 -0.61%
S&P 500 1,979.11 -9.76 -0.49%
NASD 4,801.63 -26.69 -0.55%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2015 11:32 AM
NUS $45.67 Down -0.09 -0.19%
Nu Skin Enterprise… CAPS Rating: **