5.11.2007

7 Highly Shorted Multilevel Marketing Stocks

Seeking Alpha:
"Stockerblog submits: Multilevel Marketing, Network Marketing, Direct Sales, Homebased Businesses, call it what you will, MLMs have been falling under the scrutiny of the Federal Trade Commission for years, to determine if they are pyramid or Ponzi schemes.

Short sellers even jumped on the bandwagon a few months ago, encouraging the FTC to adopt more restrictive rules for MLM companies. Some of these companies still have high short ratios and others have had a significant drop in their short interest over the past month. [By the way, a good site to check the short interest on a stock is ShortSqueeze.com.]

MLM companies operate by recruiting salespeople to sell a product and provide additional commissions based on the sales of people that are recruited into their downline. This includes direct recruits, and their recruits' recruits. There can be as many as seven to ten levels downline."

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