Tilson Not A Fan Of UNIS Or Lumber Liquidators, But Likes Starbucks

Excerpted from an email which Whitney Tilson just sent to investors

1) I had hoped to lead this email with something other than Lumber Liquidators, so was going to highlight the article I published yesterday, How Wall Street Enables Stock Promotions: A Case Study Of Jefferies And Unilife, about another one of my short positions (I only have seven).


But then Lumber Liquidators (LL) CEO, Robert Lynch, suddenly and unexpectedly resigned this morning, causing the stock to decline 16.5% today to a 3+ year low, so I had to write yet another article commenting on it (my 16th; all are posted at: Here’s a summary:

  • I was shocked by this announcement because it undermines all of the company’s denials.
  • It is powerful evidence that what I’ve been saying all along is true: Lumber Liquidators has been knowingly poisoning its customers with toxic, formaldehyde-drenched laminate flooring and, in general, is a notorious bad actor.
  • It likely means that Lumber Liquidators is under immense pressure from regulators, who will, I expect, take decisive action to rein in and punish this rogue company.
  • If Lumber Liquidators wants to start behaving like an honest and reputable company, it needs to take a number of steps.
  • I’m not adding to my short position at this price, but I’m very comfortable keeping it as my largest short.

2) Here’s the summary of my article about how Jefferies is sullying itself by pumping Unilife:

  • Unilife, which I believe is a pure promotion and likely a total fraud, continues to miss guidance and expectations.
  • The analysts at Jefferies, however, continue to rate the stock a “Buy” and urge investors to have “continued patience.”
  • This isn’t surprising, as the analysts are deeply conflicted due to Unilife’s ongoing need to raise capital.
  • I believe these conflicts are widespread on Wall Street and lead even reputable firms like Jefferies to sully themselves.

3) I gave a presentation at Baruch College on April 14th entitled Lessons from a Dozen Years of Short Selling, in which I mainly discussed Lumber Liquidators, but also answered a range of questions during the Q&A. The one hour, 46 minute video of it is posted below. The slides I used are posted below

4) In sharp contrast to Lumber Liquidators, Unilife and Jefferies is Starbucks and its CEO, Howard Schultz – a true exemplar. (Never owning Starbucks’ stock is one of the great mistakes of my investment career. I even read Schultz’s book, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, soon after it was published in 1999 so I have no excuse. Dumb, dumb, dumb!)

Shorting PDF

LL short