Shares of flooring company Lumber Liquidators plunged Friday after founder and former CEO Thomas Sullivan decided to opt out of his bid to find a buyer for the company, a week after he announced the buyout plan. Sullivan also sold the majority of his stake in the company.
The founder had upped his ownership of Lumber by 30%, or 500,000 shares on Sept. 4 through his F9 Investments, saying he wanted to take the company private or be an investor in a sale of Lumber Liquidators to another related company. The stock jumped nearly 9% that day and 15% in the following session.
But on Friday, Sullivan sold nearly 80% of his investments, or 1.75 million shares in Lumber Liquidators, according to a regulatory filing. The filing states that because the pop in the shares, he no longer believes it is undervalued. Sullivan told Bloomberg News in an interview that he was working on a deal with investment banks, but now would no longer do so because the stock had gotten too high.
Sullivan bought those shares at an average price of $7.88 per share and he sold them with an average price of $11.68 a piece, according to filings.
Lumber Liquidators didn’t immediately respond to CNBC’s request for comment.
The company has been volatile over the years. In 2015, the company took a huge hit when former hedge fund manager Whitney Tilson exposed Lumber’s health and safety violations at its factories in China, which was featured on 60 Minutes.