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NuSkin stock drops following negative Chinese news report

NuSkin stock drops following negative Chinese news report

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PROVO — Following claims made against NuSkin by the main propaganda machine of China’s Communist Party, the company’s stock has plunged and an investigation of its operations has been launched.

Wednesday, the People’s Daily published an article about the skincare company’s business practices in China, alleging NuSkin was operating an “illegal pyramid scheme.” Thursday, the State Administration for Industry and Commerce of the People’s Republic of China said in a statement that it would investigate the allegations.

Following the Wednesday report, Thursday morning, the NuSkin corporation’s stock dropped nearly 22 percent.

NuSkin responded Wednesday, saying the People’s Daily had not verified any information with the company before publishing its report and the newspaper had not written it as a result of any government inquiry.

“We are dedicated to operating in full compliance with applicable regulations as interpreted and enforced by the government of China,” the company said in a statement. “Nu Skin has an 11-year history of doing business in China under these regulations. Our business activities are regularly monitored by the government in this rapidly growing marketplace. As is our practice, we will communicate openly with regulators to address questions arising from this article.”

In July, the company expanded its direct-selling footprint in China to 19 provinces.

“We actively educate our sales force to follow all regulations as well as company policies and procedures, and any member of our sales force not operating in accordance with local law or with our company policies is subject to discipline,” NuSkin said.

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Celeste Tholen Rosenlof

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