Natural Health Trends Corp. (NDAQ:BHIP) shares moved down another 5% today after several shareholders expressed their dissatisfaction with the company's current management. The ~4% shareholders filed a
Schedule 13D/A with the SEC, and outlined their complaints in the Purpose of Transaction section:
The Reporting Persons no longer have trust or confidence in the Issuer's President, Chief Executive Officer and board member, Ms. Stephanie Hayano, and intend to work towards securing her dismissal or resignation from those positions at the earliest possible moment. The Reporting Persons believe that the Issuer's current difficulties can be attributed, for the most part, to Ms. Hayano's lack of industry experience. The Reporting Persons are of the view that Ms. Hayano does not understand the Japanese and Mexican markets in which the Issuer does business and, therefore, is unable timely to resolve direct selling issues in those markets. These two factors, the Reporting Persons believe, have significantly contributed to the declining revenues in the Japanese and Mexican markets. The Reporting Persons are also of the opinion that Ms. Hayano's failure to provide adequate leadership and management during this critical juncture may lead to a substantial decrease in the number of the Issuer's active distributors. Finally, the Reporting Persons are concerned that Ms. Hayano intends to either pull money out of the Issuer's Chinese subsidiary, which may cause a deficiency in that entity's capitalization and ultimately force it to de-register in China, or sell the Issuer's Greater China business at a fraction of its value. Either move may, in the view of the Reporting Persons, destabilize the Issuer's entire global seamless network of independent distributors. The Reporting Persons fear that, because Ms. Hayano lacks industry experience, she does not understand the possible implications of either action.
Clearly the company is facing problems as it continues to move down and most of these problems can be traced back to the company's Chief Executive Officer. With a stock that is down roughly 80% since 2006 - after the company was
subjected to a formal SEC investigation as well as related class action
lawsuits - there may be support for their proposal to remove members of management. This makes BHIP a stock
worth watching over the next few months.
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