Shares of Lumber Liquidators dropped 15.6 percent Tuesday following a announcement by Whitney Tilson, the investor who told “60 Minutes” to investigate Lumber Liquidators’ Chinese-made laminate, that he is betting against the company’s value in the market again.
The stock ended the day at $11.77; a decrease of 14 percent from the beginning of the day when it was trading at $13.70 and 82 percent since the company announced on Feb. 23, 2015, it would be investigated.
Tilson previously shorted Lumber Liquidators’ stock, beginning near the stock’s peak value of $119.44 in 2013. Tilson was shorting the company when he pitched the laminate formaldehyde off-gassing story to “60 Minutes.” He recovered his position on December 14, after the stock had dropped more than 88 percent to $14.06.
"It was a good cover then, it's a great short now," Tilson told Business Insider.
Tilson once again bet against the company, effective March 8, because he believes the cancer risk associated with the Chinese-made laminate Lumber Liquidators poses a greater cancer risk than the rate of 30 cases per 100,000 people the Centers for Disease Control and Prevention published in its revised assessment last month.
Tilson also believes Lumber Liquidators has a 50 percent chance of going bankrupt, in part because of the expenses associated with regulatory issues and formaldehyde claims for which the company’s insurers have all denied coverage.
Tilson announced the short at the Harbor Investment Conference. The full presentation is viewable online.
Meanwhile, Lumber Liquidators CIO Charles Schwartz resigned March 2 to pursue another opportunity, according to an SEC filing.
Schwartz joined the company in 2012 and served as the vice president of operations and strategy until receiving a promotion to CIO in January 2014.
