Investigative articles at the Wall Street Journal are often a great service to investors and can often have a dramatic effect on a stock’s price. A recent example is Salt Lake City-based Usana Health Sciences (USNA) whose major product is a multivitamin. On March 15, 2007, the Journal published an article that reported a recent analysis of the Company indicates that it may be a ponzi scheme. Specifically, the article suggested that the Company's sales model is unsustainable because it requires the constant recruitment of new associates. Eventually the Company will run out of distributors, who will face long odds selling products or recruiting new disciples. Subsequently, the Company disclosed that the SEC is conducting an informal inquiry of the Company.
As noted at the outset, these disclosures have had a significant effect on Usana stock. On March 15, 2007, the Company’s stock declined from $58.77 per share at the close of trading on March 14, 2007, to close at $49.85 per share, a decline of approximately 15%, on heavier than usual volume.
We are investigating this matter and investors who purchased Usana between November 7, 2006 and March 14, 2007 may be affected and may wish to contact us to discuss their options..
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