Whitney Tilson: “Lumber Liquidators, which has now gone bankrupt in part as a…”

“You shorted the stock because you knew they were doing something that was unethical, probably illegal, and was going to crash the value of the stock. Which is exactly what happened. Yes, they were. Lumber Liquidators, which has now gone bankrupt in part as a result of these revelations, was sourcing flooring, laminate flooring from China. And the Chinese manufacturers, to save money, were using glue that had a lot of formaldehyde in it that created toxic fumes that violated U.S. environmental standards. And I discovered this. The stock was a high flyer in part because their margins had grown a lot because they were buying illegal wood in China, which improved their profit margins because they could buy for less.” (16:27–16:48)

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