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Wow, what an example of a previously hot stock getting.....hmmm...what's the word....liquidated? That is just an ugly chart and the 60 minutes piece I guess was worse than expected.
The plot thickens. Apparently this story was the product of a group of investors who are shorting the stock. They sent the story to 60 Minutes. The smell of fish is growing and to use a word from another poster here, greasy.
The plot thickens. Apparently this story was the product of a group of investors who are shorting the stock. They sent the story to 60 Minutes. The smell of fish is growing and to use a word from another poster here, greasy.
Should financial funds be allowed to take their case (whether short or long, they would be "talking their book") to media outside financial media? I've started to see more of hedge funds financially backing those involved with their side of the story. I believe this is also the case with Ackman/Herbalife.
Yep, that's another story that stinks. If insider trading is illegal, then this type of investing should also be illegal. I don't see the difference in either of the two cases. The fact is that someone is profiting on bad news and that same someone is purporting that same bad news.
Well, it's a difficult question all right. What about "whistleblower's"? In many cases we encourage and reward their activity, as a safeguard against actions or conspiracies which are illegal or involve unethical activity. The recent situation at the Veteran's Administration comes easily to mind. What about tax cheats? If LL Lumber did in fact: • Sell this defective or illegal material • Put (presumably) customers at health risk • Do so knowingly • Profit from the sales
...then they have brought this upon themselves and their investors.
On the other side of the question, though, is why some investors (short sellers) should make a profit on this, and why others who had no knowledge of the situation take a loss. On the "third hand" (to blatantly steal a phrase), wouldn't those same investors have taken the same loss if the accusations had come out in the course of normal law enforcement?
Haven't had coffee yet- not able to deal with this degree of complexity right now.
I don't believe that the hedge fund was involved in getting the story to "60 Minutes", they are backing the people making the case against the company, who happened to get on "60 Minutes". But who knows.
Anyways, largest fund holders: Shares Held/Total Assets Fidelity® Growth Company 6.93 0.28 Baron Growth Retail 5.28 1.17 T. Rowe Price New Horizons 4.97 0.60
@Maurice: "But is she buying laminated flooring from Lumber Liquidators?" Jenney Montgomery Scott isn't a she, it's an investment firm located here in Chicago. Regards, Ted
I don't know the levels of formaldehyde measured offgassing from this evil flooring, but I can say that the UFFI insulation megillah 35y ago was complete bullshit. You could have <ppt undetectable 'levels', meaning none, in a house in the US after it was scare-declared unkosher, and you had to eat quite a bit on any house sale regardless. It's superb insulation and of course still in use elsewhere in the world including Europe. I would gladly use it again if I could, two houses later. I immediately wondered if the LL products were genuinely dangerous, as Cal standards are notoriously fine.
One point that hasn't been brought up yet is that LL is being singled out here in a industry full of brands. There are a number of laminated flooring brands out there including Pergo, Armstrong etc.
Formaldehyde is a common ingredient in the lamination process whether it's flooring or furniture. I wonder how the stocks of these other companies are doing?
As David points out, California standards are very fine. Their cancer warning is on just about everything.
As to the whistleblower issue, we need them to expose dangerous products or procedures where they happen. In my mind the line is crossed when someone is trying to profit on someone else's demise. There should be transparency in the process. Was it reported on 60 Minutes that these investors had a short position in LL stock?
Remember when Jim Cramer got in trouble for pumping stocks that he owned? Now he has to say that he owns the stock in his trust. It wasn't always like that.
I read coverage that said its product measured higher than others and factory workers were interviewed who said that is why it was cheaper. This is all like thirdhand.
@JC - the report noted that Whitney Tilson, hedge fund manager, had a short interest in the stock. He had roughly 30-60 sec worth of exposure stating that he was concerned about the huge increase in their profit margins.
To be somewhat fair there still appears to be a number of unknowns in this matter: - why LL claims the 60-minutes test for formaldehyde levels is the wrong test - whether or not LL knew of the high levels or was the compound just snuck in similar to the sulfides in drywall imported by China back in the early 2000's - are similar results showing up in flooring made by the same Chinese manufacturer's in other retail outlets.
Hang them if they are guilty but let's have the facts first.
Silly me Maurice. I've always thought that's something that should be done before you eviscerate a defendant in front of a national audience you know, innocent until proven guilty and all like that except in matters relating to the IRS. My bad.
Maurice, I get your point(s) loud and clear and I am well aware of how news programs are produced. However, I'm not sure that you get mine, and to be clear I have no dog in the LL fight.
Up to this point LL has been thrown under the bus. In the court of public opinion they are guilty and I don't know anyone who doesn't think this is so except for possibly their CEO. It is up to them to prove their innocence. Although it happens far more often then we realize I think it's criminal to be profiting from unproven allegations. But yeah, it's how things go.
The same line of thinking goes for the IRS. When one is audited the IRS presumes that your tax filing is nothing but a stack of lies. They do not have to prove that you are guilty of fudging the numbers, you have to prove that you are not. I believe it's he only court in this country that operates in that fashion.
Comments
http://www.mutualfundobserver.com/discuss/discussion/19274/60-minutes-comes-a-knocking-stock-falls-26#latest
http://www.cnbc.com/id/102466810
• Sell this defective or illegal material
• Put (presumably) customers at health risk
• Do so knowingly
• Profit from the sales
...then they have brought this upon themselves and their investors.
On the other side of the question, though, is why some investors (short sellers) should make a profit on this, and why others who had no knowledge of the situation take a loss. On the "third hand" (to blatantly steal a phrase), wouldn't those same investors have taken the same loss if the accusations had come out in the course of normal law enforcement?
Haven't had coffee yet- not able to deal with this degree of complexity right now.
Anyways, largest fund holders:
Shares Held/Total Assets
Fidelity® Growth Company 6.93 0.28
Baron Growth Retail 5.28 1.17
T. Rowe Price New Horizons 4.97 0.60
FYI:
Regards,
Ted
New Fan for Lumber Liquidators:
http://blogs.wsj.com/moneybeat/2015/03/03/new-fan-for-lumber-liquidators/tab/print/
Regards,
Ted
Formaldehyde is a common ingredient in the lamination process whether it's flooring or furniture. I wonder how the stocks of these other companies are doing?
As David points out, California standards are very fine. Their cancer warning is on just about everything.
As to the whistleblower issue, we need them to expose dangerous products or procedures where they happen. In my mind the line is crossed when someone is trying to profit on someone else's demise. There should be transparency in the process. Was it reported on 60 Minutes that these investors had a short position in LL stock?
Remember when Jim Cramer got in trouble for pumping stocks that he owned? Now he has to say that he owns the stock in his trust. It wasn't always like that.
- why LL claims the 60-minutes test for formaldehyde levels is the wrong test
- whether or not LL knew of the high levels or was the compound just snuck in similar to the sulfides in drywall imported by China back in the early 2000's
- are similar results showing up in flooring made by the same Chinese manufacturer's in other retail outlets.
Hang them if they are guilty but let's have the facts first.
Up to this point LL has been thrown under the bus. In the court of public opinion they are guilty and I don't know anyone who doesn't think this is so except for possibly their CEO. It is up to them to prove their innocence. Although it happens far more often then we realize I think it's criminal to be profiting from unproven allegations. But yeah, it's how things go.
The same line of thinking goes for the IRS. When one is audited the IRS presumes that your tax filing is nothing but a stack of lies. They do not have to prove that you are guilty of fudging the numbers, you have to prove that you are not. I believe it's he only court in this country that operates in that fashion.