Whitney Tilson Unloads On Lumber Liquidators-Home Depot Chatter, Says 'Nobody Is Going To Buy' Company

Shares of Lumber Liquidators Holdings Inc LL are up more than 4 percent on Friday, and at one point spiked above $22.70 on an unconfirmed rumor that Home Depot Inc HD had made a bid for the company.

In a comment to Benzinga, hedge fund manager Whitney Tilson -- who is short Lumber Liquidators -- said he believed it's "the dumbest rumor ever."

"Nobody is going to buy Lumber Liquidators, nor will any bank finance an acquisition or management buyout (even in this debt-markets-wide-open environment), because nobody – not me, not the company, not the lawyers suing Lumber Liquidators – has any idea what the liabilities are – but they are potentially large and open-ended," Tilson explained.

He asked: "What deep pockets would want to own these liabilities (not to mention the estimated $2 million per month of legal expenses)?"

The rest of Tilson's comments are below:

"At some point, probably at least two years down the road, after the regulators have weighed in, there is some clarity around the legal liabilities, and the impact on the company’s sales and margins is known, Lumber Liquidators might be an acquisition candidate – but not before.

The SEC needs to investigate rumors like this – spread, no doubt, by someone looking to sell – because it popped the stock by nearly $3 or 15%. It’s blatant market manipulation."