Lumber Liquidators CEO Robert Lynch unexpectedly quit on Thursday, less than a month after the embattled company’s chief financial officer also stepped down.
Shares of Lumber Liquidators plunged 17 percent at the open. The stock has lost more than two-thirds of its value since late February. (Get the latest quote here.)
Earlier this month the company said it was halting sales of all its Chinese laminate flooring effective immediately. The move came in the face of dozens of lawsuits over the safety of the products, as well as looming criminal charges concerning foreign sourcing.
Lumber Liquidators has been under fire since early March, when the CBS News program “60 Minutes” aired a report saying the Chinese laminate flooring contained high levels of formaldehyde, a known carcinogen.
The company’s insurers are now balking at covering it over customers’ claims.
Whitney Tilson, the prominent money manager who first brought the story to the CBS program, has been prominently shorting the stock.Tilson told CNBC on Thursday he was “shocked” by Lynch’s departure. He added that he was not adding to his bet against the company but was “comfortable keeping it as my largest short.”
Thomas Sullivan, the company’s founder, will serve as the acting CEO while the company conducts a search for Lynch’s replacement.
Lumber Liquidators also said John Presley, its lead independent director, has been appointed as non-executive chairman of the board of directors. Both appointments are effective immediately.
Lynch’s departure comes about three weeks after the company said CFO Daniel Terrell would leave in June.
—With reporting by CNBC’s Scott Wapner