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At GEO, our focus is on providing high quality insights on mid and micro cap equities, both in the China and U.S. spaces. Since our inception, we have come to be known by our GeoBargain selections, a group of stocks with a specific set of criteria that has proven to help them perform better than... More
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  • Going Long Natural Health Trends Corp. (NHTC) Is Like Playing With Fire

    On September 10, 2014, we offered th following note to our Premium Members:

    Anyone following Herbalife Ltd. (NYSE:HLF), Nu Skin Enterprises Inc. (NYSE:NUS) and USANA Health Sciences Inc. (NYSE:USNA) , know that the debate over the practices of multi-level marketing ("MLM"), particularly with U.S. companies operating in China, has been a hot topic. That is why investors will want to know what we have found out about Natural Health Trends Corp. (OTCQB:NHTC).

    After being long NHTC for nearly one year, we are now short NHTC. Our preliminary due diligence is not positive. We are still progressing with our diligence, but because NHTC fell 35% in the September 8, 2014 trading session, we thought it would prudent to alert investors to our belief that a greater implosion in shares of NHTC is in the works.

    NHTC describes itself as an international direct-selling organization that sells personal care, wellness, and quality of life" products. More specifically saying,"we are engaged in what is called network marketing or multi-level marketing." It also mentions how important China is to its business:

    "China has been and continues to be our most important business development project."

    We will be releasing the following tweets:

    • Warning notice on Chinese website regarding $NHTC e-commerce MLM platform. http://www.315online.com.cn/zhuanti/75982.html

    • According to Chinese website, NHTC operates an illegal E-commerce MLM platform

    • NHTC price action is similar to May 2004 one-day plunge of 43.9% on heels of a negative report from Hong Kong media source. Shares went on to eventually hit $0.20.

    --------

    We updated our research a few days later, publishing the Chinese article on our own platform. We did this so we could point out that on NHTC's website, the company references the brand under which its subsidiaries sell the it's products. This is of particular importance when putting the pieces of the puzzle together.

    "Subsidiaries of NHTC sell personal care, wellness, and quality of life products under the "NHT Global" brand."

    This brand, NHT Global, is mentioned in the last paragraph of the Chinese article below.

    -------

    Chinese Website Warns of Scam Regarding Multi-Level Marketing; Natural Health Trends Included in Notice

    警惕以电子商务为名的网络传销新骗局时间:2013-04-28 14:33:08

    互联网时代,电子商务飞速发展,"网购"、"网赚"等词汇在互联网上炙手可热。随着网络的发展和普及,一些传销组织开始以"电子商务"、"网络团购"、 "网络广告"、"网赚"、"网上购物"、"淘宝网店"、"网络直销"、"网络营销"、"网络代理"、"网络加盟"、"网上学习培训"、"网上基金投资"等 名义拉人头发展下线,致使大量网民受害者深陷泥潭。

    目前国内"网络传销"主要包括以下三种类型:

    一是传统传销的"网络版"

    即借助互联网平台推销实物产品,靠发展下线盈利,但这种模式过于明显,已经被非法传销企业与不法分子逐渐抛弃。

    二是靠发展下线会员增加广告点击率来给予佣金回报

    通过网络浏览付费广告获得积分,并由单一的点击广告发展为点击广告、收发e-mail、在线注册等多种方式并存。这种在线注册多为免费的,在我国发现不多,但对维护网络个人信息安全、免受垃圾邮件骚扰造成极大威胁。

    三是所谓的多层次信息网络营销(mlm)模式

    该模式的传销载体主要为购物网站。网站内容中可能包括:企业策划、个人理财、远程教育、培训、买卖商、宣传服务、信息服务、60mb空间、管理控制中心等内容,注册用户只要交纳一定数额的人民币,即可申请到一个用户名,用来使用网站提供的平台。而且,成功加入该网站后,即可有资格推荐、发展他人加入该网站,并可以按照推荐成功加入的人数获取积分。

    这三种类型网络传销主要通过网络购物、付费广告点击、网络游戏、金钱游戏等载体发展下线。

    除了这些主要的传播手段外,传销已经演变出更多新的更隐蔽的形式,如:打着"国家搞试点"、"西部大开发"等旗号,诱骗群众参与所谓的"资本运作"或"阳光工程";打着 "招聘"、"介绍工作" 、"招工"等名 义,诱骗学生、农民、下岗职工参与传销活动;打着"特许经营"、"加盟连锁"、"连锁销售"、"直销"等名义,诱骗中西部等地群众和少数民族群众到异地从 事传销活动;打着当下时髦的"电子商务"、"网络团购"、"网络广告"、"网赚"、"网上购物"、"淘宝网店"、"网络直销"、"网络营销"、"网络代 理"、"网络加盟"、"网上学习培训"、"网上基金投资"等名义,利用互联网进行传销活动;披着合法公司、企业的外衣,通过发展加盟商、业务员等形式,以 快速发财致富为诱饵,诱骗网民从事网络传销非法行为。

    不管传销组织如何伪装,消费者判断一个网站是否为传销类的网站,只需抓住网络传销的主要特征。

    特征一:虚拟性强

    网络始终是一个虚拟空间,非法传销者利用网络的虚拟这一特征,假借"电子商务"、"基金运作"、"风险投资"、"新能源开发"、"外汇交易"以及"黄金期货交易"等名义,遮人耳目,大搞"空手道",行空手套白狼之实。

    特征二:更具欺骗性

    利用网站作为传销平台,比传统意义上的传销更具欺骗性和隐蔽性。这些传销网站多打着"远程教育"、"培训个人创业"、"电子商务"、"新能源开发"的旗号吸引人,掩人耳目,遮盖其发展会员(下线)牟利的本质。

    特征三:隐蔽性强

    与传统传销相比,网络传销隐蔽性更强。发展会员都是在网络上进行,会员必须通过网站注册会员才能加入传销,并且使用的用户名都是假名或者代号,并且都有各自的登陆密码,彼此的联系主要通过电子邮件或即时通讯工具来完成。

    特征四:跨地域性传播

    互联网传播具有跨地域性,使得传销突破了地域和国界的限制,即使在一国内,也是遍地开花。但由于属地管辖的限制,各地工商部门只能就本辖区的传销活动进行监督,对全国性的传销无法从源头上切断。

    特征五:处于工商监管的"灰色地带"

    网 上资源浩繁如海,工商部门要在数以亿计的信息中发现非法传销的蛛丝马迹谈何容易。更何况,传销网站多以注册用户输入密码的方式才能登录,一般用户无法浏览 其内容,而且网站管理不在工商监管范围内,因此工商部门无法依职权主动对可疑网站进行监管,乃至直接关停,只能在现实世界中发现传销痕迹或举报的情况下才 能出击,获得案源信息渠道少,导致工商查处网络传销极为被动。

    目前,据政府通报、媒体曝光与网上交易保障中心来自消费者的投诉举报信息显示,目前国内已被查处或涉嫌网络传销的组织较为典型的主要有:"万家购物"、"太平洋直购网"、"开心部落"、"FKC国际"、"千渡船"、"十度空间"、"美国迅联网"、"至尊国际""、"搜云易购"、"TJH国际"、"通和商城"、"新加坡AG原始股"、"上海多购"、"上海家帝豪"、"金路游戏世界"、"香港ABM"、"北京金亿盟国际电子商务有限公司"、"安格电子"、 "澳洲AD网络媒体广告公司"等。

    网 上交易保障中心提醒广大网民朋友:在无法确定是否为传销网站前,千万不要轻易投入资金,建议先在网络上搜索一下有关该网站的网民评论以作参考,或者向网上 交易保障中心这样的行业组织咨询,也可以向当地消费者协会或工商部门咨询。如不慎误入传销网站,应立即向工商部门投诉或直接去当地公安派出所报警。这样可 以帮助相关部门了解情况,及时制止,以避免更多的人上当受骗。如具备立案条件,一旦传销组织破获,还有可能追回全部或部分损失。

    附一:

    涉嫌"电子商务"传销组织名单

    世联发商贸网 安格电子 世界通 斐贝国际 斐贝女人湾公司 E网商务 英国TVI旅游快车 MDG 体验中心 亚洲生活网 美国全球教育网 美亚国际 Mycool 成都麦酷电子商务有限公司 MDG 国际公司 东泰购物网 梦圆国际会所 安贝特商场 杭州安购科技有限公司(安贝特) 麦罗(MELO)国际 香港麦森(MESUN) 最牛IT传 新智培训网 新智网 新加坡新智国际 黑龙江科力奥 IPC异业联盟 E科士威 Ecosway 新加坡4D博cai电子商务网络公司 莱科萨斯"雷克瑟丝" 辽宁天元生物公司 大众邮购 南京铠鼎商贸有限公司 北京中健泰和电子有限公司 北京欧亚伟业国际商务有限公司 幸福199工程 JAIP网络手机卡 林枫公司 北京金亿盟国际电子商务 杭州太竹卫生用品有限公司 香港长和国际有限公司 [NHT Global**] 十度空间 北京金兴信投资顾问有限公司 湖北林枫商贸集团有限公司 广西永乾 环球力金(GLB) EFT (邮寄产品) 北京顺兴鸿运科技 浙江衢州吾老七用品公司 德资本 美国迅联网 "日晖"CT70服务站 广东清远盈草堂科技 深圳万户商网络科技有限公司 假"爱舍集团 美国红酒" 财富壹佰 美国瑞纳(RENA)有限公司 全国兴村富民互助社 特朗普股权投资 流动的财富 SMI 梦幻庄园 白宫资本 新加坡LV(legendventure) SIQO环球创富基金 UNAICO 美国前程 瑞典E时代 E玛国际 澳洲AD网络 通亿商城 FKC国际 千渡船 搜云易购 通和商城 UDcap原始股 易百购(中国)消费联盟 中国明明商 开心部落 新加坡AG原始股 万家购物 上海多购 上海家帝豪 金路游戏世界 香港ABM 太平洋直购 至尊国际

    **Chinese name of NHTC's brand

    ------

    We plan to issue an additional update detailing our extended thoughts on this situation.

    Disclosure: The author is short NHTC.

    Tags: NHTC, HLF, NUS, USNA
    Sep 12 10:48 AM | Link | Comment!
  • China Mobile Games (CMGE) Continues Descent Amidst Firings

    At 9:30 AM This morning, the GeoTeam alerted its Premium members of a "call to action" short trade opportunity in China Mobile Games (NASDAQ:CMGE), stating:

    "CMGE: News on China internet portals state that China Mobile Games' President was fired along with 9 mangers and 2 Vice presidents."

    The stock was trading down 14% to around $16.25 at the time.

    Later we elaborated on the situation, putting out a quick note on the situation knowing that the news would be quickly digested by the market. The stock is now trading down 25% to around $14.16.

    Our note stated that China Mobile Games (CMGE) executives were fired, and shares were weak:

    "...

    China Mobile Games (CMGE) shares are weak in early trading this morning, down over 14% to around $16.25. We could not find a reason for the declining price in any U.S. press or internet portals. However, our China due diligence team identified articles in China stating that China Mobile Games' president was fired along with 9 managers and 2 vice presidents. Here is a translated transcript from a related article:

    "CMGE issued an internal notice that CMGE removed Mr. Ying Shuling from the president position. Along with Mr. Ying Shuling, vice president Sun Jingzhi, Vice president Du Xinxing, Chenxing Game general manager Min Shuzhong, Zhuoxin Game general manager Wang Kun, distribution and supportive center director Du Juan, Oversea distribution Group vice general manager Yang Bin, platform supportive group R&D center assistant general manager Luo Xiao, procurement director are also removed from their positions. All these persons shall surrender their assignment and office suppliers within three days. These persons only can come back to work upon company's further notice."

    At this time no specific reasons were provided in the related articles as to why these individuals were fired, but we have identified rumors:

    1. Ying Shuling (President) was not "getting along " with CEO Xiao Jian and other senior executives;

    2. Ying Shuling, (President) was "taking advantage of his authority to purchase products from a related company to make additional money."

    We encourage the company to issue a press release to discuss this issue more thoroughly.

    ..."

    Obviously, we will be monitoring this story as it plays out and have taken full advantage of the trade.

    Disclosure: The author is short CMGE.

    Tags: CMGE
    Jun 19 12:45 PM | Link | Comment!
  • Medijane Pump Campaign Being Funded By Shareholder(S) By Up To $400,000 Weekly Budget!

    On 5/16/2014 we mentioned to our premium members that there has been recent third party promotional activity for Medijane (OTCQB:MJMD), and that we were looking into the story for red flags regarding the characters involved in the story.

    We stated that Tobin Smith was part of the pump campaign. It's worth noting that out of the 25 stocks Tobin has promoted (that we tracked since August 2011), the average return is negative 95%, with only two stocks showing positive returns. This increases our confidence that MJMD will ultimately dump. We were able to confirm that the promotional budget is being financed by a large shareholder/shareholders of MJMD that intend to sell the stock. One thing to keep in mind - the promotional budget is fairly sizable ($400,000 per week).

    Here is an excerpt from the disclaimer of the campaign:

    "IMPORTANT NOTICE AND DISCLAIMER: This is a paid advertisement by The Undervalued Newsletter ("UVQ"). UVQ has received $20,000 from or on behalf of Globalvision Communications LLC ("GMS") in compensation for this advertisement to enhance public awareness of Medijane Inc. ("Medijane" of the "Company"). UVQ endorser David Katz received a fee of $1,500. UVQ also expects to receive new subscriber revenue, the amount which is unknown at this time, as a result of this advertising effort. UVQ does not perform any due diligence on the stocks and companies discussed herein. UVQ relies on generally available public information and representations made by Medijane. UVQ does not purport to provide an analysis of any company's financial position, operations, or prospectus. This advertisement is not to be construed as a recommendation by UVQ, or an effort to sell or solicitation to buy or sell any security. Never invest in any advertised company unless you can afford to lose your entire investment. Medijane, the Company featured in this issue, appears as paid advertising, paid by GMS to enhance public awareness for Medijane. GMS is managing an online weekly advertising budget of up to $400,000 USD in an effort to build industry and investor awareness, paid to GMS from shareholder(s) of Medijane. These shareholder[s] hold a large amount of shares in MJMD and intend to sell those shares. Their sales of MJMD common stock will affect the value of your shares (negatively). This should be considered a direct conflict of interest. The payment is to cover costs associated with creating and distributing this report online and GMS will retain any excess funds as profit. Although the information contained in this advertisement is believed to be reliable, UVQ makes no warranties as to the accuracy of any of the content herein and accepts no liability for how readers may choose to utilize it. The information contained herein is based exclusively on information generally available to the public and does not contain any material, non-public information. Readers should perform their own due-diligence before investing in any security including consulting with a qualified investment advisor or analyst. Readers should independently verify all statements made in this advertisement…"

    Needless to say, the GeoTeam is on the case and will be releasing more due diligence on MJMD soon.

    Disclosure: I am short MJMD.

    May 19 11:53 AM | Link | 11 Comments
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