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Lemelson Capital's March Position On Lumber Liquidators Proven Correct By Latest News

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  • On March 3, 2015 Yahoo Finance reported that Lemelson Capital CIO Emmanuel Lemelson spoke out in defense of LL, arguing that there was no evidence of "intent" regarding tainted flooring.
  • Lemelson was the only firm to speak out publicly in defense of LL and its Founder Tom Sullivan.
  • Whitney Tilson's turnabout on Seeking Alpha vindicates Lemelson over 9 months later.

Lemelson Capital's March 3, 2015 position on Lumber Liquidators (NYSE:NYSE:LL) has been proven correct. Previously Lemelson was the only firm to speak out publicly in support of LL and its founder and chairman Tom Sullivan on the issue of intent regarding LL's controversial wood flooring products based on a March 2015 60 minutes expose.

Despite the significant price correction Lemelson continues to believe that open-ended legal liabilities as well as brand-impairment at the firm continue to reduce any margin of safety even at the current depressed stock price, despite the Tilson turnabout (now agreeing with Lemelson) that the accusations of "intent" on the part of senior management at LL were unfounded.

Lemelson Capital at the time had spoke with LL founder and Chairman Tom Sullivan. The following is a brief history of the Lemelson comments following those discussion and the related controversy:

On March 9, 2015 Yahoo Finance quoted Lemelson Capital founder and CIO Emmanuel Lemelson in the following excerpt:

Lemelson said it is "likely that LL was not the source of the directive to use the toxic substance" since one of the samples passed the emissions test. If Lumber Liquidators had directed the cost-cutting measures, he argued, it is likely that all samples would have failed. "The cost savings was most likely initiated by the factories themselves (perhaps aware that LL was not required by law to test)," Lemelson added

Tilson's Lumber Liquidators Story Doesn't Add Up, Lemelson Capital CIO Says - Yahoo News March 03, 2015

On December 14, 2015 Whitney Tilson in the following Seeking Alpha article wrote:

In the past week, I've received information (I can't reveal the details at this point) which leads me to believe that it's likely that senior management of Lumber Liquidators (LL): 1) Wasn't aware that the company was selling

This article was written by

Amvona profile picture
Welcome to Lemelson Capital Management Lemelson Capital focuses on deep value and special situation investments.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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