Mannatech Shares Dive Nearly 30 Percent
Monday May 9, 3:45 pm ET
Mannatech Shares Plunge Nearly 30 Percent After Article Criticizing Its Marketing Structure
NEW YORK (AP) -- Shares of Mannatech Inc., a retailer of nutritional supplements and weight-loss products, dropped nearly 30 percent on Monday following a weekend article in Barron's that criticized the company's marketing structure and noted a lawsuit charging the company with misrepresentation.
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The Sunday article also mentioned recent large sales by insiders of company stock.
Mannatech's main product is a supplement that includes an aloe plant extract that the company says promotes "optimal cellular communication." Coppell, Texas-based Mannatech also makes a line of skin care products.
The Barron's article called claims of the company's independent salespeople "extravagant" and noted that Chief Executive Samuel Caster has previously been investigated for fraud by the Texas attorney general's office. A separate civil suit in California charges Mannatech with conspiracy to commit fraud.
The company has denied the allegations in the Los Angeles case, Barron's said.
Mannatech earned 71 cents per share on sales of $294.5 million in 2004, up from earnings of 34 cents per share on $191 million in sales a year earlier.
Shares of Mannatech fell $5.65, or 28 percent, to $14.78 in afternoon trading on the Nasdaq. Shares of Carrington Laboratories Inc., which provides Mannatech with its aloe-based Manapol carbohydrate powder, fell 33 cents, or 8.2 percent, to $3.67.
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