Nu Skin’s Dirty Little (ummm …) Big Secret Exposed … In China’s Mainstream Press
Originally posted at Citron Reports by Stocklemon
It’s been a year since Citron explored the corporate actions of Nu Skin (NYSE:NUS), the Utah-based MLM Company most dependent on revenues and growth from Mainland China, while operating an illegal pyramid scheme.
In the intervening year, Bill Ackman focused attention on the legal jeopardies of the MLM model with regard to FTC regulation within the United States with his critique on Herbalife and introduced a debate on the legality of MLM. THIS REPORT DOES NOT CARE. As tweeted in the past, Citron was long HLF and most importantly readers must understand that not all MLM are created equal – Ackman just bet on the wrong horse.
A year ago, while on a CNBC debate, Deutsche Bank analyst Bill Schmitz defended Nu Skin, claiming that even if China might have some issues that made all of China disappear from Nu Skin’s financials, it accounted for only 10% of Nu Skin’s business.
WOW, HAVE THINGS CHANGED
Citron observes that Nu Skin has become extraordinarily dependent on China for a disproportionate amount of its gross revenues, and all of its growth. With its Mainland China sales now accounting for an extraordinary 28.9% of its total revenues, investors face a tremendous amount of risk from Nu Skin’s business model. Can this revenue concentration and these growth rates be even remotely sustainable?
