(Reuters) - Lumber Liquidators Holdings Inc (LL.N) lost about quarter of its market value in early trading on Monday after a report by a U.S. federal agency showed that people exposed to some types of laminate flooring sold by the company were three times more likely to get cancer than previously estimated.
The Centers for Disease Control and Prevention said it now estimated the risk of cancer was 6-30 cases per 100,000 people, compared with the 2-9 cases it had previously estimated. The CDC said the revised results were preliminary. (1.usa.gov/1KbZEAR)
Lumber Liquidators’ shares were down 24.3 percent at $10.75 shortly after the start of trading, their biggest intraday percentage loss in six months.
The CDC, in a notice on its website dated Feb. 18, said it had used an incorrect value to calculate ceiling height in its previous report published on Feb. 10.
The error meant that its estimates of the airborne concentration of cancer-causing formaldehyde were about three times lower than they should have been.
CBS’s (CBS.N) “60 Minutes” program, which broke the Lumber Liquidators story last March, highlighted the revised report on Sunday, saying it had been alerted to the possibility that the CDC scientists had made an error in the initial report.
“We sent the report to scientists at several universities and discovered the government forgot to convert feet to meters in some calculations,” program host Anderson Cooper said.
Lumber Liquidators said in an emailed statement on Monday that it had significantly strengthened its quality controls.
“We are encouraged that CDC is seeking a broader review of their conclusions,” the company said.
Lumber Liquidators’ shares and sales have been hammered since “60 Minutes” reported that the retailer’s laminates from China contained excessive levels of formaldehyde.
The company has suspended sales of all laminate flooring supplied from China.
Up to Friday’s close of $14.21, Lumber Liquidators’ shares had risen 17.5 percent since the CDC’s report on Feb. 10. But they were still down almost 80 percent since reports of problems with the flooring emerged.
Reporting by Sruthi Ramakrishnan and Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza and Ted Kerr