Lumber Liquidators (LL) stock plummets after CBS report
Lumber Liquidators sold flooring with higher levels of formaldehyde than permitted under California's health and safety standards, according to '60 Minutes.' Lumber Liquidators stock had fallen 24.8 percent before the market opened Monday morning.
Trading for Lumber Liquidators, the discount flooring company, was halted Monday after its shares dropped more than 20 percent following a CBS report that the company sold flooring with higher levels of formaldehyde than permitted under California's health and safety standards.
The trading was halted for pending news. The stock plunged 24.8 percent before the market opened Monday morning.
Lumber Liquidators Holdings Inc, a retailer of hardwood flooring in North America, sold flooring with higher levels of formaldehyde than permitted under California's health and safety standards, according to television news program "60 Minutes."
CBS's "60 Minutes" said it tested Lumber Liquidators' flooring in Virginia, Florida, Texas, Illinois and New York for levels of formaldehyde.
"Out of the 31 samples of Chinese-made laminate flooring, only one was compliant with formaldehyde emissions standards. Some were more than 13x over the California limit," according to CBS.
Lumber Liquidators said it complies with applicable regulations regarding its products, including California standards for formaldehyde emissions.
"These attacks are driven by a small group of short-selling investors who are working together for the sole purpose of making money by lowering our stock price," the company said in a statement.
Lumber Liquidators' shares plunged as much as 24 percent last week after Chief Executive Robert Lynch said CBS's "60 minutes" news program will feature the company in an "unfavorable light with regard to sourcing and product quality, specifically related to laminates."
"We will vigorously challenge any false allegations or incorrect presentations," Lynch said on an earnings call with analysts last week.
Lumber Liquidators also said the U.S. Department of Justice may seek criminal charges against the company under an Act aimed at curbing illegal harvest of tropical hardwoods.
The CBS "60 Minutes" news program was aired on March 1. (Reporting by Supriya Kurane in Bengaluru; Editing by Anupama Dwivedi)