Lumber Liquidator’s stock tumbles, after former CEO sells stock as potential buyout is ‘less prudent’

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Shares of Lumber Liquidators Holdings Inc. tumbled 12% in active afternoon trading, and have now plunged 24% in three sessions since closing at 4-month high on Tuesday. Trading volume was 6.4 million shares, compared with the full-day average of 2.2 million shares. The selloff in the wood-flooring company’s stock comes after founder and former CEO Thomas Sullivan and F9 Investments LLC disclosed that it now owned 461,895 Lumber Liquidator shares, or 1.6% of the shares outstanding, indicating Sullivan and F9 sold off 1.75 million shares in the past week, representing 6.1% of the shares outstanding, after Sullivan and F9 disclosed it had accumulated a 2,212,367-share stake, or 7.7% of the shares outstanding, in the weeks leading up to Sept. 5. Sullivan, currently the CEO of Cabinets to Go, said the reason for acquiring the large stake was to “explore various options and propose a transaction,” including a potential purchase of Lumber Liquidators. On Friday, Sullivan said he sold the bulk of his holdings because after the recent “significant” rally, the stock was “no longer undervalued,” making a potential acquisition “less prudent at these elevated levels.” Since Aug. 20, when Sullivan first disclosed it acquired a 6.0% stake, through Sept. 5, the stock had soared 55%. The stock is now up 4.5% year to date, while the S&P 500 has run up 20.0%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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