Lumber Liquidators Stock Falls
Lumber Liquidators shares got smoked on Monday after a report aired on "60 Minutes" Sunday night that showed major issues at some of the company's factories in China.
On Monday, shares of the company fell 25% to close at $38.83. Over the five trading days, shares of the company are down more than 40%.
At the opening bell on Monday, shares of the company were halted ahead of an announcement from the company regarding the "60 Minutes" report.
The "60 Minutes" report showed a factory in China making laminate flooring for Lumber Liquidators that was deliberately mislabeled to show that it complied with California regulations when it did not.
The report centered on elevated levels of formaldehyde, a known carcinogen, in Lumber Liquidators laminate flooring products sold in California. The company said "60 Minutes" used an improper testing method to find its results.
"60 Minutes" spoke to plaintiffs in a lawsuit that accuses Lumber Liquidators of selling laminate products in California with formaldehyde levels that exceed that state's standards by six or seven times, and the news program noted the state's standards were set to be adopted nationwide later this year.
Lumber Liquidators, which saw its stock nearly double in 2013 and has seen shares fall more than 50% since the beginning of 2014, said on its earnings conference call last week that the coming "60 Minutes" report was likely to be tough on the company. Lumber Liquidators shares fell about 20% last week.
On its earnings call, CEO Robert Lynch said, "We now believe the news program '60 Minutes' will feature our company in an unfavorable light with regard to our sourcing and product quality, specifically related to laminates."
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