Lumber Liquidators spikes on activist’s long bet

Daniel Acker | Bloomberg | Getty Images A shopper enters a Lumber Liquidators store in Lombard, Illinois.

Daniel Acker | Bloomberg | Getty Images
A shopper enters a Lumber Liquidators store in Lombard, Illinois.

Robert Chapman, activist investor and CEO of Chapman Capital, has taken a long position in Lumber Liquidators amid controversy over the safety of the company’s products.

Chapman told CNBC his position in Lumber Liquidators is roughly 15 percent of his fund and is partly through call options.

Lumber Liquidators’ stock spiked nearly 10 percent in early trading Wednesday.

The position comes as a surprise, as Lumber Liquidators has been under fire since CBS’ “60 Minutes” program reported the company sold flooring with higher levels of formaldehyde than permitted under California’s health and safety standards.

Last week, Whitney Tilson, the founder and managing partner of Kase Capital Management who originally brought the story to the CBS program, said he was increasing his short position against the company.

Lumber Liquidators has defended the safety of its products and dismissed the “60 Minutes” report as untrue.

Read More Lumber Liquidators slides, major short extended

Click here to see how the stock is trading now.

Tune in: Chapman will be on CNBC’s Fast Money Halftime Report at noon ET to speak on his position.

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