| Lumber Liquidators will never recover from their self-inflicted wounds. The laminate hard floors they sold to millions of households contained Formaldehyde, which is a carcinogenic noxious to adults, but life-threatening to children.
The company was doing well and growing at a reasonable pace. Then greed seized management. By buying cheap laminate floors from China their Gross Profit margin increased tremendously, causing their EPS (Earnings per share) to rise. Of course the value of the stock soared to the $90s.
Now the stock is trading about $28 per share.
The contingent liabilities for Lumber Liquidators are mounting and eventually they will become hard liabilities, and will bend the company backwards, making it collapse.
The company directors and top executives are now under investigation by the Department of Justice.
If you know anything about options, now is the time to buy some puts.
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