Lumber Liquidators Holdings Inc. fell the most in more than six months after the USA regulators said some of the retailer’s laminate flooring has a three times greater risk of causing cancer than previously stated.
Advertisement
The CDC’s error was on the calculation for ceiling height used to measure the intensity of formaldehyde exposure.
Last year, it was discovered that some of the company’s laminate flooring from China contained high-levels of formaldehyde. The company pleaded guilty to environmental crimes in October.
LL shares had been on the mend following the first CDC estimate, climbing 17 percent.
Certain types of Lumber Liquidators’ laminate flooring have a higher risk of developing cancer or other types of problems with health than what was previously believed, said health regulators in the US on Monday.
“We sent the report to scientists at several universities and discovered the government forgot to convert feet to meters in some calculations”, program host Anderson Cooper said.
The CDC continues to recommend that people take steps to reduce their exposure. The stock briefly rallied on February 1, after the company was sentenced and fined $13.2 million (http://www.marketwatch.com/story/lumber-liquidators-stock-jumps-after-sentencing-for-importing-illegal-wood-2016-02-01) for importing illegal wood, in a case that was unrelated to the “60 Minutes” allegations.
CDC said its recommendations for dealing with the floor products are the same. Its shares have fallen nearly 83 percent over the past year.
“We are encouraged that CDC is seeking a broader review of their conclusions”, the company said. Lumber Liquidators, based in Toano, Va., also began providing customers with free air-quality tests.
Beyond potentially scaring away more customers, the increased risk assessment from the CDC may also make the civil lawsuits brought against the company more costly, even devastating, according to Basham.
The good news? Lumber Liquidators has fully cooperated with the Consumer Product Safety Commission – which has led the investigation, and worked with the CDC to conduct its study – and made numerous changes to keep this kind of thing from ever happening again.
Advertisement
There was no immediate response from Lumber Liquidators when Bloomberg tried to reach the company outside regular business hours.
