Shares of Lumber Liquidators (NYSE: LL), a large chain retailing hardwood flooring products, jumped as much as 18% Wednesday. This came after Bloomberg reported the company's founder is working on a bid to take the company private.
Lumber Liquidators hit a 52-week low roughly a month ago, has shed 41% of its value over the past year, and has plunged 82% over the past five years. It's been a rough ride for investors:
Lumber Liquidators' founder, Thomas D. Sullivan, owns just under 6% of the company's shares via F9 Investments LLC; in the past he's pushed for the flooring retailer to explore strategic options including a potential sale. Sullivan also criticized management from straying away from the original formula of low overhead and expenses that helped grow the chain nationwide; he told Bloomberg that management was "spending money like crazy."
Image source: Getty Images.
Between the stock's dismal performance over the past five years, and its now trading at a fraction of its all-time high, investors who have hung on with the company are likely ready for a change. That could be Sullivan convincing management to slash corporate expenses while increasing advertising, or the company going private and providing investors with a small stock-price boost and exit strategy. Sullivan's long-term plan could be to convince banks and/or private equity to take the retailer private, then combine it with his current Cabinets To Go business.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own)
- What Is an ETF?
- 5 Recession-Proof Stocks
- How to Beat the Market
This article was originally published on Fool.com