Boston, MA 03/25/2014 (wallstreetpr) – Shares of Nu Skin Enterprises, Inc. (NYSE:NUS), a company that makes and sales skin and hair cleaners, jumped the most in eight months just when the company got penalized. Shares don’t gain when a company is losing money on fines to the government in relation to unethical business practices. But the case with Nu Skin was different.
So then, why was it possible for the shares to gain in a seemingly unfortunate development? We take a closer look at the latest developments and why the end was actually better than expected, thus pushing up the share.
Path cleared, fine less than feared
Shares of Nu Skin Enterprises, Inc. (NYSE:NUS) fell almost 40 percent when investigations into the company’s sales practices became public. With the investigations ongoing, the fear was that the company might be denied sales in China if found guilty of the sales practice violation. Moreover, on top of risk of losing market in the world’s fastest growing economy, investors feared that the company might end up paying through the nose for the identified violations. But none of these unfortunate events came to pass, so the stock got wins to fly during Monday session.
The Chinese government fined Nu Skin Enterprises, Inc. (NYSE:NUS) $540,000, for illegal sale of products and making unsubstantiated claims about its products. The amount of penalty was not a lot of money as investors feared it could run into millions of dollars.
On yet another positive note coming from the investigations, the company retained its market in China, only that recommendation have been made that the company take proactive steps to properly equip its sales representatives.
And now with the investigation headache behind it, Nu Skin Enterprises, Inc. (NYSE:NUS) has gained undivided attention in improving its business.
Takeaway
Resuming normal business activity will enable Nu Skin Enterprises, Inc. (NYSE:NUS) to bring its shares to the prices they enjoyed before the investigation trouble set in, and even attain higher positions. Shares were up more than 18 percent to $88.66 during the previous session.
