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Mannatech (MTEX): Still making money because people are still stupid

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When the XFL failed after just one season, I breathed a sigh of relief: Apparently it really was possible to lose money by assuming that the American public is stupid.

Well Texas-based multi-level marketer Mannatech (NASDAQ: MTEX) has proven that the assumption of stupidity is alive and well as a means of making money -- or at least keeping your stock price from collapsing even more than it already has.

On Tuesday afternoon, founder Sam Caster resigned as CEO to "allow him to step back from operating responsibilities to focus his efforts on working with field sales leaders to transition to Mannatech's new global wellness sales program."

The press release didn't even mention the Texas Attorney General's investigation that has pummeled the stock of late -- a pretty brazen case of corporate spin. Even if Caster really is resigning to work with field sales leaders, isn't that indicative that the company is facing pretty serious problems? And remember, Mannatech's army of associates is its bread and butter. If that's in disarray (it is), the whole company is a train-wreck (it is).

So how did the stock respond? It was up more than 3% on Wednesday, and continued to rise on Thursday.

Who says markets are efficient?

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Last updated: November 12, 2009: 01:49 AM

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