Amway is an American multi-level marketing company that sells health and home care products. The company is based in Ada, Michigan. Amway and its sister companies under Alticor reported sales of $8.8 billion in 2018. It conducts business through a number of affiliated companies in more than a hundred countries and territories. Amway has been investigated in various countries and by institutions such as the Federal Trade Commission for alleged pyramid scheme practices. Jay Van Andel and Richard DeVos had been friends since school days and business partners in various endeavors, including a hamburger stand, an air charter service, a sailing business. In 1949, they were introduced to the Nutrilite Products Corporation by Van Andel's second cousin Neil Maaskant. DeVos and Van Andel signed up to become distributors for Nutrilite food supplements in August, they lost interest for the next two weeks. They traveled to Chicago to attend a Nutrilite seminar soon after, at the urging of Maaskant, who had become their sponsor.
They watched promotional filmstrips and listened to talks by company representatives and successful distributors they decided to pursue the Nutrilite business. They sold their second box of supplements on their return trip to Michigan, proceeded to develop the business further. Earlier in 1949, DeVos and Van Andel had formed the Ja-Ri Corporation to import wooden goods from South American countries. After the Chicago seminar, they turned Ja-Ri into a Nutrilite distributorship instead. In addition to profits on each product sold, Nutrilite offered commissions on sales made by new distributors introduced to the company by existing distributors—a system known as multi-level marketing or network marketing. By 1958, DeVos and Van Andel had built an organization of more than 5,000 distributors; however and some of their top distributors formed the American Way Association, or Amway, in April 1959 in response to concerns about the stability of Nutrilite and in order to represent the distributors and look for additional products to market.
Their first product was called Frisk, a concentrated organic cleaner developed by a scientist in Ohio. DeVos and Van Andel bought the rights to manufacture and distribute Frisk, changed the name to LOC, they subsequently formed the Amway Sales Corporation to procure and inventory products and to handle sales and marketing plans, the Amway Services Corporation to handle insurance and other benefits for distributors. In 1960, they purchased a 50% share in Atco Manufacturing Company in Detroit, the original manufacturers of LOC, changed its name to Amway Manufacturing Corporation. In 1964, the Amway Sales Corporation, Amway Services Corporation, Amway Manufacturing Corporation merged to form the Amway Corporation. Amway bought controlling interest of Nutrilite in 1972 and full ownership in 1994. Amway expanded to Australia in 1971, to parts of Europe in 1973, to parts of Asia in 1974, to Japan in 1979, to Latin America in 1985, to Thailand in 1987, to China in 1995, to Africa in 1997, to India and Scandinavia in 1998, to Ukraine in 2003, to Russia in 2005, to Vietnam in 2006.
In 2014, a Russian loyalty card program called "Alfa-Amway" was created when Amway joined with Alfa-Bank. Amway was ranked as the 42nd largest held company in the United States by Forbes in 2018, as the number one largest company on the Direct Selling News Global 100 list in 2018. In 1999 the founders of the Amway corporation established a new holding company, named Alticor, launched three new companies: a sister Internet-focused company named Quixtar, Access Business Group, Pyxis Innovations. Pyxis replaced by Fulton Innovation, pursued research and development and Access Business Group handled manufacturing and logistics for Amway and third-party clients; the main difference was that all "Independent Business Owners" could order directly from Amway on the Internet, rather than from their upline "direct distributor", have products shipped directly to their home. The Amway name continued being used in the rest of the world. After all Amway distributors in North America switched to Quixtar, Alticor elected to close Amway North America after 2001.
In June 2007 it was announced that the Quixtar brand would be phased out over an 18- to 24-month period in favor of a unified Amway brand worldwide. In 2006, Quixtar published The Quixtar Independent Business Owner Compensation Plan, in which the company reported that the average monthly gross income for "Active" IBOs was $115. According to the Amway website, as of 2011 the company operates in over 100 countries and territories, organized into regional markets: the Americas, greater China and Korea, SE Asia/Australia. Amway’s top ten markets are China, the United States, Thailand, India, Russia and Italy. In 2008, Alticor announced that two-thirds of the company's 58 markets reported sales increases, including strong growth in the China, Russia and India markets. See Amway Australia Private Ltd. Amway China launched in 1995. In 1998, after abuses of illegal pyramid schemes led to riots, the Chinese government enacted a ban on all direct selling companies, including Amway. After the negotiations, some companies like Amway and Mary Kay continued to operate through a network of retail stores promoted by an independent sales force.
China introduced new direct selling laws in December 2005, in December 2006 Amway was one of the first companies to receive a license to resume direct sales. However, the law forbids teachers
Mary Kay Inc. is an American owned multi-level marketing company. According to Direct Selling News, Mary Kay was the sixth largest network marketing company in the world in 2018, with a wholesale volume of US$3.25 billion. Mary Kay is based in Addison, outside Dallas; the company was founded by Mary Kay Ash in 1963. Richard Rogers, Mary Kay's son, is the chairman, David Holl is president and was named CEO in 2006. Mary Kay sells cosmetics through a multi-level marketing model. Mary Kay distributors can make income by directly selling to people in their community, receive a commission on wholesale purchases made by people they recruit into the distribution network. Mary Kay distributors must purchase a $100 starter kit to qualify; as a private company, Mary Kay releases few details about the average income of its sellers. In 2005, Mary Kay reported. In 2010, worldwide wholesale figures were reported at US$2.5 billion. In 2015, worldwide wholesale figures were reported at US$3.7 billion. In 2018, worldwide wholesale figures were reported at US$3.25 billion.
None of these figures take into account product returns. The table below shows the company's reported sales figures in more detail. Note: Unless otherwise stated, dollar amounts are in United States Currency, which has not been adjusted for inflation. A second plant was opened in China, to manufacture and package products for that market. A third plant was opened in Switzerland, for the European market; the Swiss plant closed in 2003. In 1968, Mary Kay Ash purchased the first pink Cadillac from a Dallas dealership, where it was repainted on site to match the "Mountain Laurel Blush" in a compact Ash carried; the Cadillac served as a mobile advertisement for the business. The following year, Ash rewarded the company's top five salespeople with painted 1970 Coupe de Ville cars. GM has painted over 100,000 custom cars for Mary Kay; the specific shade has varied over the years from bubble-gum to near-white pearlescent effects. GM had an exclusive agreement to sell cars of the specific shade only through Mary Kay.
The cars are offered to distributors as two-year leases, distributors who choose to buy the cars are only allowed to resell them to authorized dealers. After the lease expires, the cars are repainted before being resold. Mary Kay has different incentive levels for its consultants. Independent Beauty Consultants can earn the use of a white Chevy Cruze, in August 2014 introduced the limited edition Lipstick Red color option for limited time, or cash compensation of $375 a month. Independent Sales Directors can choose Chevy Equinox, or $500 a month. Top Independent Sales Directors can choose between the pink Cadillac CTS, or cash option of $900 a month; the specific qualifications for earning the car depend upon the country, vehicle, desired. If those qualifications are not met the distributor has to pay for a portion of the lease of the car for that month. Meeting the qualifications entitles the distributor to pay no monthly lease and 85% of the car insurance, or a pre-determined cash compensation award.
In 2011, a solid black Ford Mustang was introduced as an incentive. In 2014, a black BMW was introduced in its place, although the pink Cadillac remains the top reward for those distributors whose units purchase over $100,000 or more in a year. There is no tracking by the company of actual sales. Internationally, the cars available vary depending on the regions and countries. There are two ways for consultants to earn money in Mary Kay: Recruiting Retail sales "Recruiting commission earnings" reflects the commission and bonuses of 4, 9 or 13% that one earns from the wholesale purchases of their team or unit; these bonuses come straight from Mary Kay corporate and not from said consultants team or units pockets. It does not include income from retail sales nor does it include income from the Mary Kay tools business. In 2018 Mary Kay claimed the following incomes for its salesforce: 29,500 people were consultants during the year. Mary Kay consultants earn a 50 % gross profit on products; the quoted figure of US$1,057.14 per year for the average consultant derives from dividing the annual wholesale sales by Mary Kay Inc. by the number of Mary Kay consultants.
This figure does not account for product returns, eBay, sales at a discount, purchases by "personal use consultants"—all of which would lower this figure. A 68.6% per annum turnover figure has been calculated based upon information supplied by Mary Kay to the Federal Trade Commission. An 85% per annum turnover figure has been calculated, based upon the data supplied by Mary Kay; that document excludes individuals who earn a commission and are in the company for less than one year. It excludes individuals who are in the company for more than one year but do not earn a commission check; the 2004 court case Woolf v. Mary Kay Cosmetics was decided in favor of the plaintiff, Claudine Woolf. In doing so it marked the first time that workplace rights could be applied to independent contractors who worked from their home; this decision was stayed and reversed after an appeal. The Supreme Court denied certiorari on 31 May 2005. In this case, Woolf was terminated from her position as director because h
Cosmetics are substances or products used to enhance or alter the appearance of the face or fragrance and texture of the body. Many cosmetics are designed for use of applying to the face and body, they are mixtures of chemical compounds. Cosmetics applied to the face to enhance its appearance are called make-up or makeup. Common make-up items include: lipstick, eye shadow, foundation and contour. Whereas other common cosmetics can include skin cleansers, body lotions and conditioner, hairstyling products and cologne. In the U. S. the Food and Drug Administration, which regulates cosmetics, defines cosmetics as "intended to be applied to the human body for cleansing, promoting attractiveness, or altering the appearance without affecting the body's structure or functions". This broad definition includes any material intended for use as a component of a cosmetic product; the FDA excludes pure soap from this category. The word cosmetics derives from the Greek κοσμητικὴ τέχνη, meaning "technique of dress and ornament", from κοσμητικός, "skilled in ordering or arranging" and that from κόσμος, meaning amongst others "order" and "ornament".
Cosmetics have been in use for thousands of years. The absence of regulation of the manufacture and use of cosmetics has led to negative side effects, deformities and death through the ages. Examples are the prevalent use of ceruse, to cover the face during the Renaissance, blindness caused by the mascara Lash Lure during the early 20th century. Egyptian men and women used makeup to enhance their appearance, they were fond of eyeliner and eye-shadows in dark colors including blue and black. Ancient Sumerian men and women were the first to invent and wear lipstick, about 5,000 years ago, they crushed gemstones and used them to decorate their faces on the lips and around the eyes. Around 3000 BC to 1500 BC, women in the ancient Indus Valley Civilization applied red tinted lipstick to their lips for face decoration. Ancient Egyptians extracted red dye from fucus-algin, 0.01% iodine, some bromine mannite, but this dye resulted in serious illness. Lipsticks with shimmering effects were made using a pearlescent substance found in fish scales.
Six thousand year old relics of the hollowed out tombs of the Ancient Egyptian pharaohs are discovered. According to one source, early major developments include: Kohl used by ancient Egypt as a protectant of the eye. Castor oil used by ancient Egypt as a protective balm. Skin creams made of beeswax, olive oil, rose water, described by Romans. Vaseline and lanolin in the nineteenth century; the Ancient Greeks used cosmetics as the Ancient Romans did. Cosmetics are mentioned in the Old Testament, such as in 2 Kings 9:30, where Jezebel painted her eyelids—approximately 840 BC—and in the book of Esther, where beauty treatments are described. One of the most popular traditional Chinese medicines is the fungus Tremella fuciformis, used as a beauty product by women in China and Japan; the fungus increases moisture retention in the skin and prevents senile degradation of micro-blood vessels in the skin, reducing wrinkles and smoothing fine lines. Other anti-aging effects come from increasing the presence of superoxide dismutase in the brain and liver.
Tremella fuciformis is known in Chinese medicine for nourishing the lungs. In the Middle Ages, it seemed natural that the face should be whitened and the cheeks rouged. During the sixteenth century, the personal attributes of the women who used make-up created a demand for the product among the upper class. Cosmetic use was frowned upon at many points in Western history. For example, in the 19th century, Queen Victoria publicly declared make-up improper and acceptable only for use by actors. Many women in the 19th century liked to be thought of as fragile ladies, they emphasized their delicacy and femininity. They aimed always to look interesting. Sometimes ladies discreetly used a little rouge on the cheeks and used "belladonna" to dilate their eyes so it would make them stand out more. Make-up was frowned upon in general during the 1870s when social etiquette became more rigid. Teachers and clergywomen were forbidden from the use of cosmetic products. During the 19th century, there was a high number of incidences of lead-poisoning because of the fashion for red and white lead makeup and powder.
This led to swelling and inflammation of the eyes, weakened tooth enamel, caused the skin to blacken. Heavy use was known to lead to death. However, in the second part of the 19th century, great advances were made in chemistry from the chemical fragrances that enabled a much easier production of cosmetic products, it was acceptable for actresses in the 1800s to use makeup, famous beauties such as Sarah Bernhardt and Lillie Langtry could be powdered. Most cosmetic products available were still either chemically dubious or found in the kitchen amid food coloring and beetroot. By the middle of the 20th century, cosmetics were in widespread use by women in nearly all industrial societies around the world. In 1968 at the feminist Miss America protest, protestors symbolically threw a number of feminine products into a "Freedom Trash Can." This included cosmetics, which were among items the protestors called "instruments of female torture" and accouterments of what they perceived to be enforced femininity.
As of 2016, the world's
The Longaberger Company
The Longaberger Company was an American manufacturer and distributor of handcrafted maple wood baskets and other home and lifestyle products. Its old corporate headquarters on Ohio's State Route 16 is a local landmark and a well-known example of novelty architecture, since it takes the shape of the company's biggest seller, the "Medium Market Basket", it was one of the primary employers in the area near Ohio. Founded in Dresden, the company moved to Ohio. A family-owned and operated business, the Longaberger Company was started by Dave Longaberger in 1973. Longaberger used multi-level marketing to sell products; the company had about 45,000 independent distributors in the United States who sold Longaberger products directly to customers. In 1919, J. W. Longaberger accepted an apprenticeship with The Dresden Basket Factory. Although the Dresden Basket Factory closed during the Great Depression, Longaberger continued to make baskets on the weekends, he and his wife Bonnie Jean Longaberger raised enough money to purchase the closed basket factory and start a business of their own.
One of J. W. and Bonnie's children, opened J. W.'s Handwoven Baskets in 1973. Starting in 1978, the company began selling Longaberger baskets through home shows using a multi-level marketing model; each basket was handmade and dated by the maker. A combination of a recession and changing tastes in home decor combined to send sales, which peaked in 2000 at $1 billion, to about $100 million in 2012. In 2013, the company was taken over by Inc.. In May 2015, Tami Longaberger, who had led the company since her father died in 1999, resigned as chief executive officer and director of the company. In February 2016, the company said it would sell the Basket Building and move its employees to Longaberger's factory in Frazeysburg, Ohio; as of April 2016, there were fewer than 75 part-time employees. On May 4, 2018, a note was sent out from a sales force supervisor that the company had ceased operations; the seven-story, 180,000-square-foot building was designed by The Longaberger Company, executed by NBBJ and Korda Nemeth Engineering.
The building opened in 1997. The basket handles weigh 150 tons and can be heated during cold weather to prevent ice damage. Dave Longaberger wanted all of the Longaberger buildings to be shaped like baskets, but only the headquarters was completed at the time of his death; the company stopped paying property taxes on the building at the end of 2014. Workers moved out in 2016. In December 2017, the building was purchased by Steve Coon, a Canton, Ohio–based developer who owns Coon Restoration, his partner, Bobby George, of Cleveland. By November 2018, the pair had put it up for sale. Official website The Travel Channel "John Ratzenberger's Made In America". World Collectors Net Longaberger Information and Message Board
A ticker symbol or stock symbol is an abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market. A stock symbol may consist of numbers or a combination of both. "Ticker symbol" refers to the symbols. Stock symbols are unique identifiers assigned to each security traded on a particular market. A stock symbol can consist of letters, numbers, or a combination of both, is a way to uniquely identify that stock; the symbols were kept as short as possible to reduce the number of characters that had to be printed on the ticker tape, to make it easy to recognize by traders and investors. The allocation of symbols and formatting convention is specific to each stock exchange. In the US, for example, stock tickers are between 1 and 4 letters and represent the company name where possible. For example, US-based computer company stock Apple Inc. traded on the NASDAQ exchange has the symbol AAPL, while the motor company Ford's stock, traded on the New York Stock Exchange has the single-letter ticker F.
In Europe, most exchanges use three-letter codes, for example Dutch consumer goods company Unilever traded on the Amsterdam Euronext exchange has the symbol UNA. While in Asia, numbers are used as stock tickers to avoid issues for international investors when using non-Latin scripts. For example, the bank HSBC's stock traded on the Hong Kong Stock Exchange has the ticker symbol 0005. Symbols sometimes change to reflect mergers. Prior to the 1999 merger with Mobil Oil, Exxon used a phonetic spelling of the company "XON" as its ticker symbol; the symbol of the firm after the merger was "XOM". Symbols are sometimes reused. In the US the single-letter symbols are sought after as vanity symbols. For example, since Mar 2008 Visa Inc. has used the symbol V, used by Vivendi which had delisted and given up the symbol. To qualify a stock, both the ticker and the exchange or country of listing needs to be known. On many systems both must be specified to uniquely identify the security; this is done by appending the location or exchange code to the ticker.
Although stock tickers identify a security, they are exchange dependent limited to stocks and can change. These limitations have led to the development of other codes in financial markets to identify securities for settlement purposes; the most prevalent of these is the International Securities Identifying Number. An ISIN uniquely identifies a security and its structure is defined in ISO 6166. Securities for which ISINs are issued include bonds, commercial paper and warrants; the ISIN code is a 12-character alpha-numerical code that does not contain information characterizing financial instruments, but serves for uniform identification of a security at trading and settlement. The ISIN identifies not the exchange on which it trades. For instance, Daimler AG stock trades on twenty-two different stock exchanges worldwide, is priced in five different currencies. ISIN cannot specify a particular trade in this case, another identifier the three- or four-letter exchange code will have to be specified in addition to the ISIN.
While a stock ticker identifies a security that can be traded, stock market indices are sometimes assigned a symbol though they can not be traded. Symbols for indices are distinguished by adding a symbol in front of the name, such as a caret or a dot. For example, Reuters lists the Nasdaq Composite index under the symbol. IXIC. In Canada the Toronto Stock Exchange TSX and the TSXV use the following special codes after the ticker symbol: In the United Kingdom, prior to 1996, stock codes were known as EPICs, named after the London Stock Exchange's Exchange Price Information Computer. Following the introduction of the Sequence trading platform in 1996, EPICs were renamed Tradable Instrument Display Mnemonics, but they are still referred to as EPICs. Stocks can be identified using their SEDOL number or their ISIN. In the United States, modern letter-only ticker symbols were developed by Standard & Poor's to bring a national standard to investing. A single company could have many different ticker symbols as they varied between the dozens of individual stock markets.
The term ticker refers to the noise made by the ticker tape machines once used by stock exchanges. The S&P system was standardized by the securities industry and modified as years passed. Stock symbols for preferred stock have not been standardized; some companies use a well-known product as their ticker symbol. Belgian brewer InBev, the brewer of Budweiser beer, uses "BUD" as its three-letter ticker for American Depository Receipts, symbolizing its premier product in the United States, its rival, Molson Coors Brewing Company, uses a beer-related symbol, "TAP". Southwest Airlines pays tribute to its headquarters at Love Field in Dallas through its "LUV" symbol. Cedar Fair Entertainment Company, which operates large amusement parks in the United States, uses "FUN" as its symbol. Harley-Davidson uses "HOG" for its Harley Owners Group. Yamana Gold uses "AUY", because on the periodic table of elements. Sotheby's uses the symbol "BID". While most symbols come from the company's name, sometimes it happens the other way around.
Tricon Global, owner of KFC, Pi
Multi-level marketing called pyramid selling, network marketing, referral marketing, is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company's products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system. Although each MLM company dictates its own specific financial compensation plan for the payout of any earnings to their respective participants, the common feature, found across all MLMs is that the compensation plans theoretically pay out to participants only from two potential revenue streams; the first is paid out from commissions of sales made by the participants directly to their own retail customers. The second is paid out from commissions based upon the wholesale purchases made by other distributors below the participant who have recruited those other participants into the MLM. MLM salespeople are, expected to sell products directly to end-user retail consumers by means of relationship referrals and word of mouth marketing, but most they are incentivized to recruit others to join the company's distribution chain as fellow salespeople so that these can become down line distributors.
According to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission's website, at least 99% of people who join MLM companies lose money. Nonetheless, MLMs function because downline participants are encouraged to hold onto the belief that they can achieve large returns, while the statistical improbability of this is de-emphasised. MLMs have been made illegal or otherwise regulated in some jurisdictions as a mere variation of the traditional pyramid scheme, including in mainland China; the overwhelming majority of MLM participants participate at either an insignificant or nil net profit. Indeed, the largest proportion of participants must operate at a net loss so that the few individuals in the uppermost level of the MLM pyramid can derive their significant earnings. Said earnings are emphasized by the MLM company to all other participants to encourage their continued participation at a continuing financial loss; the end result of the MLM business model is, one of a company selling its products and services through a non-salaried workforce working for the MLM company on a commission-only basis while the partners constitute the overwhelming majority of the consumers of the MLM company's products and services that they, as participants of the MLM, are selling to each other in the hope of one day themselves being at the top of the pyramid.
This creates great profit for the MLM company's actual shareholders. Many MLM companies do generate billions of dollars in annual revenue and hundreds of millions of dollars in annual profit. However, the profits of the MLM company are accrued at the detriment to the majority of the company's constituent workforce. Only some of said profit is significantly shared with individual participants at the top of the MLM distributorship pyramid; the earnings of those top few participants is emphasized and championed at company seminars and conferences, thus creating an illusion of how one can become financially successful if they become a participant in the MLM. This is advertised by the MLM company to recruit more distributors to participate in the MLM with a false anticipation of earning margins which are in reality theoretical and statistically improbable. Although an MLM company holds out those few top individual participants as evidence of how participation in the MLM could lead to success, the reality is that the MLM business model depends on the failure of the overwhelming majority of all other participants, through the injecting of money from their own pockets, so that it can become the revenue and profit of the MLM company, of which the MLM company shares only a small proportion of it to a few individuals at the top of the MLM participant pyramid.
Participants, other than the few individuals at the top, provide nothing more than their own financial loss for the company's own profit and the profit of the top few individual participants. The main sales pitch of MLM companies to their participants and prospective participants is not the MLM company's products or services; the products/services are peripheral to the MLM model. Rather, the true sales pitch and emphasis is on a confidence given to participants of potential financial independence through participation in the MLM, luring with phrases like "the lifestyle you deserve" or "independent distributor." Erik German's memoir My Father's Dream documents the real life failures of German's father as he is lured into "get-rich-quick" schemes such as Amway. The memoir illustrates the multi-level marketing sales principle known as "selling the dream". Although emphasis is always made on the potential of success and the positive life change that "might" or "could" result, it is only in otherwise difficult to find disclosure statements, that MLM participants are given fine print disclaimers that they as participants should not rely on the earning results of other participants in the highest levels of the MLM participant pyramid as an indication of what they should expect to earn.
MLMs rarely emphasize the extreme likelihood of failure, or the extreme likelihood of financial loss, from participation in MLM. MLMs are als
Mannatech is a multinational multi-level marketing firm that sells dietary supplements and personal care products, with a history of false claims and lawsuits. It is headquartered in Flower Mound, Texas; the company's stock is traded on the NASDAQ exchange under the symbol MTEX. As of 2017, Mannatech employed 252 people and sold its products through some 220,000 independent sales associates. Mannatech and its salespeople made false claims of anti-disease benefits about its lead product called "Ambrotose" which contains sugars derived from plants; the company was profitable soon after its founding until about 2008, when it started losing money due to exposure of its business practices through a class action lawsuit based on the false health claims, a critical 20/20 news special, a civil suit filed by the Attorney General of Texas. Mannatech was founded by Samuel Caster in 1993, as Congress prepared to pass the Dietary Supplement Health and Education Act of 1994, which made feasible the profitable marketing of a wider spectrum of dietary supplements.
The company has had a Christian orientation since its founding. Prior to founding Mannatech, Caster had founded and run Eagle Shield, an insulation manufacturer, Electracat, a pest control device. Mannatech was founded to sell personal care products. Before developing its own products, the company sold Manapol, an aloe vera extract made by another company, its most known product has been Ambrotose, a dietary supplement made from sugars derived from plants. From 1993 to 2009, Rafael Cruz, father of presidential candidate Ted Cruz, was a top salesman for Mannatech. Mannatech had its initial public offering on February 1999, at $8 a share; the stock price settled a few weeks at a price of $15.13 a share and a market capitalization of $366 million. The IPO raised $12 million in funds to be used for expansion into Australia and the U. K; the company came to be known for unproven claims that its products could be used to treat many diseases and conditions, including cancer, autism and AIDS. There is no evidence that any of these claims are true.
In May 2005 an article was published in Barron's questioning the company's business practices. In September 2005, a class-action lawsuit was filed against Mannatech for alleged violations of the Securities Exchange Act. In 2006, Mannatech distributor Vivienne Balonwu, a U. K. general practitioner, was found by the U. K. General Medical Council panel to have "abused her power as a doctor" after it was determined that she had illegally promoted and sold the company's products to people as a treatment for medical conditions such as chronic obstructive pulmonary disease and stroke-related complications. Following patient complaints about her marketing of the products in 2006, Balonwu was dismissed by her employer, Harmoni, a medical services company, the GMC panel imposed a 15-month penalty period during which she was "to avoid private or short term locum work" and "to complete a supervised personal development plan to tackle shortcomings in her practice". In 2006, Mannatech was named #5 on Forbes’ list of America's 200 Best Small Companies.
At the same time, the company came under investigation by the Texas Attorney General in October 2006 for alleged violations of that state's Deceptive Trade Practices Act. In July 2006, Texas Attorney General Greg Abbott formally charged Mannatech, MannaRelief, Sam Caster, Reginald McDaniel, the company's medical director, with operating an illegal marketing scheme in violation of state law. A 20/20 undercover investigation that aired June 1, 2007 on ABC Television showed Mannatech's sales associates teaching sales recruits how to target Mannatech products to people with specific illnesses in a manner that purportedly does not violate U. S. federal law, including U. S. Food and Drug Administration regulations, by avoiding direct claims that the products cure any particular diseases. In August 2007, Caster resigned as CEO of Mannatech. In October 2007, it was reported that the company had fired Grant Thornton LLP as its auditor after the accounting firm demanded that Mannatech remove Caster from all responsibilities to be replaced by Wayne Badovinus as the new chief executive.
Several corporate initiatives were undertaken, but after 17 months on the job Badovinus resigned in December 2009. Another member of the board resigned shortly after. Mannatech's Chief Science Officer Robert Sinnott and Mannatech's chief financial officer Steve Fenstermacher were named Co-CEOs. Fenstermacher resigned. Publicity over the company's lawsuits began to damage stock performance. After profits of $32 million in 2006 and $6.6 million in 2007, Mannatech reported a $12.6 million loss in 2008 and a $17.3 million loss in 2009. Mannatech settled the civil complaint with the State of Texas in February 2009. In addition, Sam Caster agreed to pay a $1 million civil penalty and steer clear of any type of leadership position or employment relationship with Mannatech for five years. In March 2008, Mannatech settled the class-action lawsuit by agreeing to pay $11.25 million to the plaintiff class. As part of the settlement, Mannatech admitted; as the company's market capitalizations continued to fall, S&P Indices dropped it from the S&P 600 Index, stating "They are no longer representati