Lumber Liquidators Removes All Chinese-Made Laminate Floors

Lumber Liquidators Holdings Inc LL fell more than 2 percent in pre-market trading after CNBC reported that the company will stop all sales of its Chinese-made laminate flooring. That flooring was the subject of a "60 Minutes" expose that suggested the flooring contained elevated levels of formaldehyde. According to "60 Minutes" at the time, the exposure could be as large as 100,000 homes.

Since that report, the stock has collapsed more than 47 percent as regulators have piled on to investigate the allegations. The U.S. Consumer Product Safety Commission launched an investigation in March. That month, sales slipped 13 percent. In April, the company said that sales for the quarter were tracking to be down nearly 2 percent from a year ago.

The company has been on the defensive since the segment aired. It also sent out indoor testing kits to more than 15,000 customers. Of the initial analysis of 3,400 kits, the company 97 percent of customers had indoor air quality of formaldehyde that was within World Health Organization guidelines.

The company also hired former FBI Director Louis Freeh to oversee how the company investigates these claims and ensures compliance to standards in the future.

The stock is also a hedge fund battleground where Whitney Tilson on the short side is up against Robert Chapman on the long side. Since Chapman announced his position on March 11, the stock has declined nearly 8 percent. Tilson announced his short on October 21, 2014. The stock has declined nearly 54 percent since then.

Image credit: Dwight Burdette, Wikimedia