The Spike in Lumber Liquidators: Why the Move? And Why is it a Perfect Opportunity to Short?

Shares of Lumber Liquidators ($LL) spiked today following an earnings report, that in all honesty was, for lack of a better term, egregious. Shares are up over 18% as I write this article on a reported earnings of -$0.20 per share, equating to a company loss of about $5.5MM in Q4. With over 12 million shares short at the time of earnings, its no wonder that there would inevitably be a spike with any sort of positive news. This positive news however, still confirms that the Virginia based company is losing money. I believe that the spike, caused by a classic short squeeze, provides the ultimate opportunity to take a short position, as the chart appears to be topping out. Expect this spike to fall back to yesterdays levels or lower over the course of the next few weeks.

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