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Tilson Not A Fan Of UNIS Or Lumber Liquidators, But Likes Starbucks

Excerpted from an email which Whitney Tilson just sent to investors 1) I had hoped to lead this email with something other than Lumber Liquidators Holdings Inc (NYSE:LL), so was going to highlight the article I published yesterday, How Wall Street Enables Stock Promotions: A Case Study Of Jefferies And Unilife, about another one of my short positions (I only have seven). But then Lumber Liquidators (LL) CEO, Robert Lynch, suddenly and unexpectedly resigned this morning, causing the stock to decline 16.5% today to a 3+ year low, so I had to write yet another article commenting on it (my 16th; all are posted at: www.tilsonfunds.com/LLTilsonarticles.pdf).

Value Walk
BY Jacob Volinsky

New York (May 21, 2015)

Excerpted from an email which Whitney Tilson just sent to investors

1) I had hoped to lead this email with something other than Lumber Liquidators Holdings Inc (NYSE:LL), so was going to highlight the article I published yesterday, How Wall Street Enables Stock Promotions: A Case Study Of Jefferies And Unilife, about another one of my short positions (I only have seven).

But then Lumber Liquidators (LL) CEO, Robert Lynch, suddenly and unexpectedly resigned this morning, causing the stock to decline 16.5% today to a 3+ year low, so I had to write yet another article commenting on it (my 16th; all are posted at: www.tilsonfunds.com/LLTilsonarticles.pdf). Here’s a summary:

  • I was shocked by this announcement because it undermines all of the company’s denials.
  • It is powerful evidence that what I’ve been saying all along is true: Lumber Liquidators has been knowingly poisoning its customers with toxic, formaldehyde-drenched laminate flooring and, in general, is a notorious bad actor.
  • It likely means that Lumber Liquidators is under immense pressure from regulators, who will, I expect, take decisive action to rein in and punish this rogue company.
  • If Lumber Liquidators wants to start behaving like an honest and reputable company, it needs to take a number of steps.
  • I’m not adding to my short position at this price, but I’m very comfortable keeping it as my largest short.

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