Lumber Liquidators is surging ahead of a press conference by regulators about its laminate flooring
Lumber Liquidators is surging.
Shares jumped by as much as 8% in early trading on Wednesday.
The Consumer Product Safety Commission is holding a press conference to address recent reports that Lumber Liquidators flooring may pose a health risk to customers. The commission has oversight over certain kinds of consumer products and can recall or ban goods that it considers unsafe.'
Chairman Elliot Kaye said the commission is investigating Lumber Liquidators and it will take months before their tests are concluded.
CBS' '60 Minutes' investigated the company and found that its laminate flooring sourced from China contains levels of formaldehyde that exceed regulations set by the California Air Resources Board, and are potentially cancer-causing.
Lumber Liquidators said the reporters used an improper testing method, and offered to examine its customers' flooring for free. It said hedge fund manager Whitney Tilson, who tipped off '60 Minutes,' is looking to profit from short positions that he and other investors hold on the stock.
On Sunday, Sen. Chuck Schumer (D-New York) called for an investigation, and there have been several class action lawsuits against the company.
Lumber Liquidators is down more about 56% year-to-date, and about 70% over the past 12 months.
Here's a chart showing the early pop:
