LL Flooring Jumps after Merger Plans Emerge

While the pandemic boom of flooring renovation may be behind us, it didn't stop LL Flooring (NYSE:LL) from surging on a wave of double-digit gains in Thursday afternoon's trading. So what prompted such a surge to come out of a company whose specialty is floorboards? Word of a potential merger ahead, that's what.

The latest reports, as expressed by a 13-D filing with the SEC, noted that Thomas D. Sullivan—founder of the privately-held Cabinets to Go firm—is considering a merger with LL Flooring. To that end, Sullivan has already bought 9.447% of the company, and hopes to move the board accordingly. Meanwhile, as far as LL Flooring is concerned, it's business as usual for now. LL Flooring is aware of the move, but is instead focusing on "…core growth strategies and…our value creation objectives."

LL Flooring posted its latest earnings report about two weeks ago, and from the look of it, it could stand more focus on its core growth strategies. LL Flooring posted earnings of -$0.31 per share, and that proved a miss for two reasons. Not only was it a loss, but it was also a loss bigger than the one analysts expected. Analysts were looking for a loss of just $0.15 per share. Revenue, meanwhile, fared no better. Down 13.7% against the same time the previous year, LL Flooring posted $240.69 million in revenue, disappointing analysts a second time, as they looked for $258.4 million.

Despite the earnings troubles, hedge funds are clearly giving LL Flooring the benefit of the doubt. Hedge funds stepped up their holdings by 113,000 shares last quarter, which puts hedge fund confidence clearly into Positive territory.

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