Lumber Liquidators Stock Tanks After CDC Report

Shares of hardwood floor retailer Lumber Liquidators Holdings Inc. LL, -16.36% slumped 22% in pre-market trade Monday, after the Centers for Disease Control and Prevention said it had made an incorrect assessment of the cancer risk associated with the company's flooring, and said it is much higher than other products. The CDC said recent testing of the company's wood had used an incorrect value for ceiling height. "As a result, the health risks were calculated using airborne concentration estimates about 3 times lower than they should have been," it said in a statement. After correcting the model, the CDC said the flooring, which is imported from China, can create respiratory issues for people with asthma or related illnesses, and can cause irritation for the eye, nose and throat for anyone else. "The estimated risk of cancer is 6-30 cases per 100,000 people," said the statement, and not 2-9 cases per 100,000 people as previously reported. The CDC recommends taking steps to reduce exposure, and will move ahead with a final report on the issue. Problems with Lumber Liquidators wood was highlighted in a "60 Minutes" report broadcast March of 2015, which alleged that Chinese laminates contained much higher-than-acceptable levels of formaldehyde, a known carcinogen. The stock fell to as low as $11.69 in January, from its peak of $68.78 in Feb. of 2015, just before the news broke.
Courtesy of Market Watch