Whitney Tilson: Lumber Liquidators Price Spike Would Allow 'Me To Short More'
Lumber Liquidators Holdings Inc (NYSE: LL) shares were up more than 11 percent in the after-hours session after the company reached a settlement with the Department of Justice's Environment and Natural Resources Division related to its compliance with the Lacey Act, an investigation that began in 2013.
According to the company's press release, the investigation "related to certain foreign suppliers harvesting more timber than their permits allowed in foreign jurisdictions, such as Eastern Russia, and the Company's importation of flooring products made from this timber."
As part of the settlement, Lumber Liquidators said it will pay $10 million in fines, a figure the market appears to view positively.
In a statement soon after, noted short-seller Whitney Tilson said the agreement has "nothing to do with the much bigger poisoning-their-customers-with-formaldehyde issue," adding that he believes the company "got off easy."
Tilson, who first presented his Lumber Liquidators short thesis on November 22, 2013, at the Robin Hood Investors Conference, said he hopes to "get lucky and the stock will bounce enough for [him] to short more."
In his initial presentation in 2013, Tilson said the key for the company's long-term health is to "ensure" it's no longer purchasing illegal wood.
Lumber Liquidators traded at $115.36 at that time; the stock now trades just above $16 per share.
Tilson's short thesis, circa 2013:
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