Lumber Liquidators shares plunged to a six-month low after news Monday that certain types of laminate flooring made by the company pose a greater risk of cancer or other health problems than what was previously calculated.
The Centers for Disease Control and Prevention initially released a report on Feb. 10 that estimated that exposure to the laminate flooring could result in between two and nine cancer cases per 100,000 people. However, it was reportedly notified of a mistake in its estimates and released a revised report on Feb. 18 that increased the estimates to six to 30 cases per 100,000 - effectively tripling what it once was.
Though the report doesn't mention LL by name, the release triggered a series of press reports over the weekend that tied the increased cancer risk to the company's products.
LL shares had been on the mend following the first CDC estimate, climbing 17 percent. However, the new estimate, along with the associated press reports, shook investors, who had been encouraged by the inital findings, causing the company's shares to go down 22.03 percent in premarket trading, according to CNBC.
This ongoing situation stems from a report on 60 Minutes from last March that alleged Lumber Liquidators knowingly used China-sourced laminates that possessed excessive levels of carcinogens. The company tried to defend itself, arguing that its flooring was indeed safe, but sales plunged regardless and ex-CEO Robert Lynch resigned.
The company has since halted the sale of the controversial China-sourced laminate, but the damage has already been done to both its reputation and finances. LL has already reached a $10 million settlement with the Justice Department, and it still faces a probe in California.
