Shares in Nu Skin rally as China probe could end soon
Nu Skin Enterprises shares gained the most in eight months after the company agreed to pay fines to the mainland government, signalling that an investigation into its sales practices could be nearing an end.
Nu Skin Enterprises shares gained the most in eight months after the company agreed to pay fines to the mainland government, signalling that an investigation into its sales practices could be nearing an end.
Nu Skin was fined US$540,000 for selling items illegally and making product claims it could not verify, a statement said on Monday, about two months after the government announced the probe. Six employees were also fined US$241,000 for unauthorised promotional activities.
The move sparked optimism that Nu Skin could now get back on track in the world's second-largest economy, sending its stock up 18 per cent in New York.
The company, which offers skin and hair cleansers through independent sales representatives, has come under scrutiny as part of Beijing's clampdown on the direct-selling industry.
"[The fines] could indicate a path towards resuming normal activities in the market," said Mark Astrachan, an analyst with Stifel Nicolaus & Co in New York.
The rally marked the biggest one-day increase since July last year. The stock had plunged 38 per cent in January after the investigation became public.