Lumber Liquidators: Black And White

There’s a reason I love stories like this Lumber Liquidators (LL) saga.  So here are the cliff notes: Shorts have been critical of Lumber Liquidators for years for a variety of reasons. Whitney Tilson presented the stock at the 2013 Robin Hood Conference, and updated his thesis in October of 2014. Even before Tilson’s original short thesis presentation in November of 2013, others had written articles about potential problems with LL products being contaminated with unacceptable levels of formaldehyde.

Last night 60 Minutes aired a 13 minute segment where they detailed the claims of an environmental attorney (Richard Drury) and a non-profit director (Denny Larson), who (at the behest of short sellers who backed them) bought and tested a number of samples of Lumber Liquidators’ Chinese-made laminate flooring:

“Drury and Larson bought more than 150 boxes of laminate flooring at stores around California and sent them to three certified labs for a series of tests. The results? While laminate flooring from Home Depot and Lowes had acceptable levels of formaldehyde, as did Lumber Liquidators American-made laminates, every single sample of Chinese-made laminate flooring from Lumber Liquidators failed to meet California formaldehyde emissions standards. Many by a large margin.”

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Kurt Benson 5 years ago Member's comment
Nice article. For those who want to read more about this, Mish is covering it