View from City Road: Lacking conviction at Betterware

Remember Betterware, the one- time stock market glamour stock that outperformed the average by an astonishing 1,500 per cent in the five years to June 1993? Its chairman, Walter Goldsmith, and chief executive, Andrew Cohen, were as intrusive in the way they sold their company to investors and the press as its door-to- door salesmen were with its products - low-ticket household items.

There's rarely been a more predictable case of a company heading for a fall. Fortunately for Mr Cohen and his family, they did a Conrad Black and flogged a large chunk of their shares close to the top. The Cohen clan sold 13.4 million shares at a near peak of 230p. Not much has changed for the company fundamentally since then, but the share sale was really all that was required. Despite remedial action in November, when Mr Cohen bought back 400,000 shares at 196p, the stock has slid further. It now trades 65 per cent below levels 12 months ago.

In a further gesture of support, Mr Cohen yesterday bought back another 9,850 shares - this time at 88p to fill up a Personal Equity Plan. If the move was intended to shore up shattered investor sentiment it somehow lacked conviction. Mr Cohen's wife and Mr Goldsmith also bought shares for PEPs this week but the total outlay of pounds 26,000 rather pales into insignificance against the pounds 31m the Cohens managed to take out of the stock market at the peak. Mr Cohen and his cohort might also remember that a PEP protects the investor from tax liabilities, not capital depreciation.