Tags: Ben Carson | Mannatech | Stock Bubble | Seeking Alpha

Seeking Alpha: Ben Carson-Caused Bubble in Mannatech Stock Bursts

Seeking Alpha: Ben Carson-Caused Bubble in Mannatech Stock Bursts
Ben Carson

By    |   Friday, 13 November 2015 09:15 AM

The party apparently is over for the share price of Mannatech Inc., which soared in the wake of the publicity about its relations with Republican presidential candidate Dr. Ben Carson.

Stock in the Coppell, Texas, nutritional-supplements company soared more than 40 percent in wake of the initial publicity, but later tumbled 24 percent on disappointing earnings. The stock closed Thursday on the Nasdaq at $20.17, up 55 cents, or 2.80 percent.

Carson and his presidential campaign moved quickly to distance the retired neurosurgeon from Mannatech, which paid $7 million to settle a case brought by the Texas attorney general over allegations that the company deceptively marketed its products as cure-alls for diseases like cancer, Bloomberg reported.

Seeking Alpha warns that because “the story about Mannatech and Carson is out of the headlines, meaning the stock will now trade on fundamentals.  The fundamentals are weak, as it is losing associates to sell its products.”

Seeking Alpha bluntly says: “The company is in decline because its business model is flawed.”

Seeking Alpha said that "since Mannatech is a multilevel marketing company, it needs to recruit new 'independent associates.' It doesn't work well if every quarter the business sees fewer and fewer new associates, because there is a high turnover rate in this model."

Seeking Alpha also said Mannatech needed an amazing quarter to sustain its valuation. "That didn't happen, as the company reported a 21.2% decline in sales."

Meanwhile, Carson's top business adviser, Armstrong Williams, has said Mannatech officials ambushed Carson at a forum he filmed in January 2014 that aired the following March on a PBS affiliate in Phoenix, Bloomberg reported.

A year before, Bloomberg reported, Mannatech officials approached Carson to appear in a 2013 video for an African orphanage charity and then edited the videos to make it look as if he were endorsing the company. Mannatech did not respond to multiple requests for comment. The company admitted no wrongdoing in settling the case.

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The party apparently is over for the share price of Mannatech Inc., which soared in the wake of the publicity about its relations with Republican presidential candidate Dr. Ben Carson.
Ben Carson, Mannatech, Stock Bubble, Seeking Alpha
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2015-15-13
Friday, 13 November 2015 09:15 AM
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