Lumber Liquidators (LL) Shares Slump as Tilson Goes Short Again

(Updated - March 8, 2016 2:25 PM EST)

(Updated - March 8, 2016 2:19 PM EST)

Lumber Liquidators (NYSE: LL) shares dropped after Kase Capital's Tilson said he reestablished a meaningful short on the stock. Tilson said new information leads him to believe that the odds of a very bad outcome for Lumber Liquidators has risen materially.

Tilson made several points in a presentation passed around by traders.

• Widespread media coverage of the CDC’s error and increased cancer risk appears to be having a severe impact on the business
• The cancer risk is likely significantly greater than even the CDC’s revised estimate, which could result in further damaging publicity and increased liabilities
• A “Prop 65” trial has just begun that LL is likely to lose, resulting in further adverse publicity
• Likelihood of even larger legal and regulatory liabilities
• Operating performance of the business in Q4 was much worse than I expected – and I think meaningful improvement is unlikely for quite some time (if ever)
• Lack of confidence in company leadership

The investor previously exited his short on the company last December.

UPDATE - Tilson provided the following pdf on Tuesday, which is embedded below. LL stock is down 5.6 percent on the session.

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