Hedge Fund Mgr. Smacks Lumber Liquidators For Ties To Illegal Russian Timber Trade

A hedge fund manager has downgraded Lumber Liquidators' stock over the company's alleged links to illegal logging in the Russian Far East, reports The Wall Street Journal.

Speaking at the Robin Hood Investors Conference on November 22, Whitney Tilson, the founder of Kase Capital Management, said Lumber Liquidators' stock price may be inflated due to purchases of illegally sourced timber from Russia, which is less costly than legitimately-sourced wood. He set a two-year price target of $53 for the stock, which was trading at $115 at the time. The stock plunged 12 percent after the presentation.

Tilson's remarks were based on a recent report published by the Environmental Investigation Agency (EIA). A multi-year undercover investigation by the green group found that Lumber Liquidators (NYSE:LL) has been buying illegally logged timber smuggled from Russia into China. EIA said the practice violates the Lacey Act, which holds U.S. buyers criminally responsible for buying illegal forest products.

Lumber Liquidators said the report “contained numerous inaccuracies and unsubstantiated claims”. Nonetheless, Tilson expressed skepticism about Lumber Liquidators' claims, noting that U.S. authorities raided the company in response to the investigation.

EDIT

http://news.mongabay.com/2013/1202-lumber-liquidators-stock-illegal-logging.html