Two Multi-Level Marketing Stocks Are Getting Hammered Today

Shares of multi-level marketing stocks Nu-Skin and Herbalife are tumbling today.

The stock is off more than 20%. The shares are currently halted.

Earlier this week, a negative article ran in the “The People’s Daily” in China that criticised NuSkin’s marketing practices. It also said that the anti-ageing products seller could be operating as a pyramid scheme.

A spokesperson for NuSkin told Business Insider that the article was full of “inaccuracies and exaggerations.”

The Wall Street Journal is reporting that China’s State Administration of Industry and Commerce said they would investigate NuSkin following the article.

Meanwhile, shares of Herbalife, an MLM that sells nutritional products, have continued to decline. The stock was last down about 10%.

Herbalife is the company that hedge fund manager Bill Ackman has publicly called a “pyramid scheme.”

In December 2012, Ackman said that he was shorting more than 20 million shares of Herbalife with a price target of $US0.

Since he announced his bearish bet, a number of fund managers, including Carl Icahn and George Soros, have piled on by going long the stock. Shares of Herbalife has risen more than 86% since Ackman made those comments resulting in hundreds of millions of mark-to-market losses for Pershing Square Capital Management.

Here’s a five day chart for NuSkin:

Here’s the Herbalife chart:

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