Lumber Liquidators falls
BY Elizabeth Dash
New York (March 13th, 2015)
A recent disparagement with short-selling investors has forced Lumber Liquidators to defend the quality of its inventory, as well as the integrity of the company. On, March 1, 60 Minutes, the investigative news program, attacked Lumber Liquidators. It claimed the company was selling laminate flooring with formaldehyde levels exceeding regulations set by the California Air Resources Board.
The telecast featured Whitney Tilson, founder and managing partner of Kase Capital management, who accused the company of poor business practices. Lumber Liquidators’ stock has performed well in the New York Stock Exchange, with its highest value in November 2013. Tilson brought the claim against Lumber Liquidators to 60 Minutes, which then decided to air the report.
During the program, Tilson explained the issue and then disclosed the results of lab tests that had been conducted to investigate his assertions. Some of the samples came back with results 13 times above the legal formaldehyde limits in the state of California. Interviews of Chinese warehouses featured in the program reassured the legitimacy of the illegal formaldehyde levels, claiming they were suppliers of Lumber Liquidators.