Whitney Tilson At It Again, Calls Lumber Liquidators 'Evil'
Tilson wrote that the company was "knowingly endangering the health and safety of its customers, especially children, by continuing to sell toxic Chinese-made laminate."
In an effort to "lure customers" the company slashed prices as it had developed "bloated inventory levels overall – $314 million as of the end of 2014, equal to six months of sales," according to Tilson.
In addition to cutting prices, Tilson said that company's "second strategy to move its toxic laminate is to lie to its customers by telling them ‘our laminate products, all of our products, are 100 percent safe.'"
Tilson seemed baffled by the company's claims and said that it was "unbelievably foolish of Lumber Liquidators to [claim the products are safe] because it's provably false," and noted that CEO Rob Lynch admitted on a conference call that the company knew 'that [CARB's] tests on some deconstructed samples have had elevated levels [of formaldehyde].'"
The investor felt that the company's actions dramatically increased its "legal liability and reputational damage."
Tilson asked, "So why is Lumber Liquidators doing this?"
He concluded: "It can only be the result of pure desperation."
"What Lumber Liquidators is doing is obvious, it's evil, and must stop immediately," Tilson concluded.
Lumber Liquidators closed at $27.89 Monday, down 2.17 percent.
Image credit: Dwight Burdette, Wikimedia
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