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Direct Selling Under Attack

The recent news about short sellers taking on Herbalife had the direct selling industry wondering what’s next. Well, now we know. They’re going after everyone.

by Jonathan Gilliam, Momentum Factor

 

Today, a leading financial website added USANA to its target list.

This is a big deal. The attacks are based on the idea that personal consumption is “pyramid-like” and that a company whose distributors consume products can’t count those sales as sales. These attacks are ludicrous. We all know many, many people are attracted to our companies because of the products. The idea that distributors who buy products aren’t buying them because they want them is absurd. I personally love products from this industry. They’re better. They’re innovative. The ones I buy I can’t find anywhere else. And I don’t sell them, I just buy them, from my friends, because I like them. Is something wrong with that?

Add to that, the direct selling industry has outperformed the majority of consumer industries through the recession and has provided billions of dollars in income to people who have really needed it during this time. Can’t say the same for Wall Street. On top of the issue, the Direct Selling Association (DSA) released a statement Thursday to try to correct the misleading statements of these short sellers. I hope the world sees this for what it is, a cynical stock play from vulture investors seeking to profit on the backs of good companies.

Unfortunately, this will hurt the entire direct selling category in the public markets for a while as vultures take their profits. But it won’t last.

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