Lumber Liquidators Holdings Inc (NYSE:LL)’s Formaldehyde-Rich Flooring Under Lens Of Federal Regulators

After Lumber Liquidators Holdings Inc (NYSE:LL) sold the flooring with high quantity of formaldehyde content, it came under the lens of the federal regulators. The regulators at Consumer Product Safety Commission (CPSC) in the U.S. said that the company shall be meticulously investigated as well as tested for its products, some of which are as old as being produced in 2012. The Chairman of commission, Elliot F. Kaye, said that the results of investigation shall be released in the near future.

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The 60-Minutes Report engulfed Lumber

Lumber Liquidators Holdings Inc (NYSE:LL) came under the microscopic vision of the Commission after the “60 Minutes” Report of CBS, which was released on March 1, 2015. The report said that the company has sold China-manufactured laminate flooring, which has high content of a renowned kind of carcinogen, formaldehyde.

No effect on investors

The investigation doesn’t seem to have any effect on the investors of the company, who still managed to increase of value of the company’s stock in the market. Perhaps, the reason was announcement of the company that CPSC will not be making use of the same 60 Minutes testing, which was employed earlier to reveal this information.

The company has, however, several times defended itself on the grounds that the methods employed by news program of CBS were not reliable, and that they have used the safety measures for the products.

Lumber Liquidators Holdings comes out a winner

In the entire scenario, Lumber Liquidators Holdings has come out as a clear winner. According to Janney Montgomery Scott LLC analyst, David Strasser, the fears of “floor safety” have been blown unnecessarily.

Echoing the same arguments as that of the company, the CPSC Chairman said that the regulator will not use the same technique because it will not repeat how floors were made to use in the homes.

The company has also offered from its end, the free testing to the consumers and assured that it would replace the unsafe floors, if any.

John Eisler

John Eisler

John is a special projects and general assignment reporter, noted for breaking several exclusive stories.