six months after he bet millions the stock would go down, whitney tilson got tipped off by someone familiarer liquidators' operations in china, who said he was missing the bigger story. >> tilson: the much bigger story, he said, is that lumber liquidators was almost certainly purchasing formaldehyde-tainted laminate flooring in china. >> cooper: why would lumber liquidators purchase wood that's tainted with formaldehyde? >> tilson: the answer is greed. plain and simple. it's cheaper and net it reduces the cost by about ten percent. >> cooper: which in a business with these kinds of profit margins, ten percent means it's a lot of money? >> tilson: it's enormous. >> sullivan: our goal is to sell a good product at a good price. and we don't get the price by skimping on anything. we get the price by low overhead, huge volume and being very efficient at what we do. and we're never gonna sell something unsafe. >> cooper: do you trust your mills in china? >> sullivan: we do. we have inspectors that double- check them. the mills are licensed by california... the chinese mills we deal with in the la

. >> the one of the, shorts on this as you know is whitney tilson. i emailed whitney tilson. i said do you and carl get along? we should have full screen. yes, we are friends. he spoken twice to my conference. we both made a fortune on netflix. melissa: when it comes down to money he likes you. he loves to make money. i like that. >> i don't know where he will go on this i do know his staff will look at it. if you see a big pop in the stock next couple days you will know what he did. melissa: moving the stock, charlie gasparino. one day before the deadline iran nuke talks hit a major stumbling block as iran backs away from a key part of the deal. iranian officials refusing to shift nuclear materials out of the country. this is crucial part to insure they can't develop a bomb. what happens from here, judy? does it think a deal false apart or will we cave further. >> ups and downs and people holding their hands in their heads and screaming accusations. this is diplomatic equivalent of a soap opera. everybody will try to seem they made the ultimate concession or they have been t

he disagrees with whitney tilson on the lumber liquidators short he's long the stock and why after the>>> the competition for trader of the year continues. six "halftime" traders, one epic battle. who will reign supreme in the ultimate portfolio challenge. keep up with every move on the "halftime report" and go to cnbc pro for real-time trading alerts, plus exclusive insight and analysis behind the trades. sign up now at cnbc.com/pro for your limited time free preview. the portfolio challenge on the "halftime report" noon eastern weekdays on cnbc. when i was on wall streetnd music begins ] ♪ i felt trapped in that i was investing in a health care industry that i didn't believe in. for years i really struggled with this idea that people were making money off my illness and i wanted to do something different and so i finally made that change. [thunder and rain] [thunder and rain] [thunder and rain] now with the you can watch live tv anytime. it's never been easier with so many networks all in one place. get live tv whenever you want. the xfinity tv go app. now with live tv on the go. enj

we should point out that the short is whitney tilson on lumber luck by day to haves, the investor --actually gave "60 minutes" much of its story that led to the sharp decline when they alleged they had products that have a high degree of a carcinogen in them, their flooring products. so that touched out an interesting battle where whitney tilson basically told the fox business network that he and carl love each other. there it is, yes, we are friends. he has spoken twice at my conferences, and we both made a fortune on netflix, and we're both charter school advocates. so our little story forced a dialogue hoar. [laughter] again, can't tell you whether it's long or short. it's my job just to tell you what's happening, you know? sometimes what has happened, if it's exclusive, but clearly internally and icahn and associates, they are looking at lumber liquidators. they may pass, they may not pass, but they're looking at it. cheryl: i will never fight with you on twitter, by the way. [laughter] i've seen you take people down. >> yeah, but you don't -- you're, like, a nice person. [laught

whitney tilson says, you're trying to mislead customers investigators and regulators.onse? >> total nonsense. i mean this guy is connected to barry minco. look that up and see how much credibility he has. >> mr. sullivan, i think we're going to leave it there. thanks so much for joining us today. >> all right. thank you very much. >> all right. tom sullivan, the founder and chairman of lumber liquidators. coming up, bob iger hits the decade as the head of disney. shares up 30%. is now the time to buy and will "frozen" 2 be another slam dunk? the trade on disney is coming up on the half. >>> the competition for trader of the year continues. six "halftime" traders, one epic battle. who will reign supreme in the ultimate portfolio challenge. keep up with every move on the "halftime report" and go to cnbc pro for real-time trading alerts, plus exclusive insight and analysis behind the trades. sign up now at cnbc.com/pro for your limited time free preview. the portfolio challenge on the "halftime report" noon eastern weekdays on cnbc. [ male announcer ] your love for tradin

. >> betting against it whitney tilson, thank you, and scarlet fu will have another edition of off the the break. "bottom line" returns in a moment. ♪ ♪ >> welcome back, the dow said another record high, but now the focus is on the nasdaq, breaking 5000, and scarlet fu joins us from the breaking news desk with today's version of off the charts and king of off the charts, what is going on -- and speaking of off the charts, what is going on? >> 5000 back on march 9, 2000, then the following day, a higher record, so this is today's chart, showing the recovery back to those levels, and you have two distinct p -- two distinct peaks and with the nasdaq there was the low, then the run-up to the housing bubble and it did not even reclaim 3000 four it was knocked down again by the -- did not even reclaim 3000 before it was knocked down again. you can see the trajectory of this. >> scarlet let's revisit the first trip to 5000. it was fast. how do you quantify how long it took to get there the first time around, versus what we are seeing this cycle? >> using the bloomberg terminal and this is a s

these types of products, if this is really a toxic issue and there's ways of looking at it, the whitney tilsonoking at it and the way other shorts look at it and say it's not so bad, if it's closer to whitney's analysis than the other guys and the company's analysis, this could have a major impact on the company. this sort of stuff has the potential for killing this company. liz: they need independent testing here. charlie: they will. and there will be investigations. for the average investor, this is like stay away. by the way, we did very well in earlier the nelson story. trion asset management. >> they're supporting the currency eo. unlike marcato. they are -- they want the ouster of gerard. nelson is on the board. he's been working with the company. he wants a constructive engagement. if you look at it, shares -- shot up a little bit. >> yeah, they did. but that's a one-month picture. if we had an intraday you would see that we have jumped from the opening low of 39.98 to 40.30 today. >> we should point out that nelson, part of his constructive conflict with the company is a possible break

hear what tom sullivan has to say, the company under a lot of pressure from whitney tilson at t-2. more coming your way on that show. more coming your way on "money" because melissa francis is here. it starts now. melissa: that's right. thank you so much charlie, stop it. nice try kremlin. rumors swirling about the health of vladmir putin after he hasn't been seen in over a week. fake television trying to reassure russians with new video, new video. but it looks awfully familiar to us. meanwhile our president making rounds. he joined late night host jimmy kimmel to face down critics to offer scathing grammar critique. two attorneys debate, is it better to come clean or to cover up a scandal, or say destroy the evidence? hillary clinton, and al sharpton might want to tune in for this one because even when they say it's not it is always about money. ♪ melissa: it is a true friday the 13th for wall street. energy dragging on stocks as the dow and s&p are on track for a third straight losing week. it doesn't stop there. oil getting crushed, hitting another two-month low. on top of all

whitney tilson. >>> up next, taking a walk down memory lane.l what the tradeers wish they bought back in 2000. maybe what they wish they didn't. more after that next. ♪ building aircraft, the likes of which the world has never seen. this is what we do. ♪ that's the value of performance. northrop grumman. if legalzoom has your back.s, over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here. hey mom, you want to live by the lyeah.right? there's here. ♪ did you just share a listing with me? look at this one. it's got a great view of the lake. it's really nice mom. ♪ your dad would've loved this place. you're not just looking for a house. you're looking for a place for your life to happen. zillow ♪ [epic music] introducing aleve pm... the pm pain reliever. that dares to work all the way until... [birds chirping] the am. new aleve pm. it's the first to combine a safe sleep aid plus the 12 hour strength of aleve. for pa

expect, we may get some response from the short sellers who have been pushing this case, led by whitney tilson said that, regardless of the test methods used, if the competitors wound up testing so much lower in formaldehyde than lumber liquidators' flooring, how do they explain that and they did not explain that on the call today. >> the first chance to give sullivan some q&a, interesting to watch. thanks scott cohen. >>> alibaba investing $200 million in snapchat in a deal that reportedly values the messaging company at $15 billion. snapchat was previously valued at $10 billion after the latest round of funding one of the most valuable start-ups rumored to have more than 100 million users. not part of a broader fund raise. >> i don't know. it's unclear exactly what snapchat is doing but a lot of people want in on this one. what's interesting to me, i kind of asked a few months ago, wrongly, clearly, is anybody into snapchat anymore. apparently so. their growth appears to be strong. the big question with the mega valuation, do they have a platform. it's one thing to have users, engagement, th

interview with robert chapman about his long position in lumber liquidators and why short seller whitney tilsoning it wrong and plus why the top ranked hardware analyst on wall street is underwhemds by the iwatch and how it might impact apple shares from here and, of course, we're going to be all over the markets as usual. that and much more straight ahead on the halftime show. we'll see you in about 15. >> thanks, scott. a news alert, let's get to mary thompson at headquarters. >> hey, kayla. we have the numbers from the new york state comp trollers estimate of wall street bonuses. wall street bonuses according to thomas anapoli, edges up 2% in 2014 to $172,860,000. the average bonus pool for wall street, rose to $28.5 billion. there is one thing to note in the report that the securities industry employment actually increased in 2014 and that's the first time we've seen an increase in employment according to the report since 2011. the bonuses peaked in 2008. a small increase even as profits in the securities industry declined. this coming from the comptroller. back to you. >> mary thompson at

case capital's whitney tilson, he called today's conference call a quote, continuation of the company's campaign of distraction, end quote. it was up 14% at one point. it did come down quite a bit from the high point down to 5% gain. liz: either way you have activists battling around this one. david: you have short and long. liz: story is not over. pick a time frame, year-to-date, one year, five-year, biotech stocks no matter what you choose outperformed nasdaq look at this margin, huge. some are warning these stocks have become too hot. ahead a biotech bubble battle. david: only 276%. plus retail sales disappointing badly. whatever happened to the low gas price bump we were supposed to get for retailers? was it all weather? or did we overestimate the strength of our economy? we'll ask former ceo of staples and autozone. liz: speaking of sales, it wanted slow sales that but it was the weather. we'll ask our panel to pick a side and pick a stock. david: talk about cold weather, we're talking about "frozen" anyway, the movie "frozen" was a hot hit for disney. you know there always is a se

again, with lumber liquidators, with whitney tilson. if they can have an investigation into herbalife and bill ackman, why can't you have similar? because "60 minutes" episode. >> right. >> the stock gets whacked. management comes out and says wait a second. this story is not over yet. and typically, it doesn't end well for short sellers. >>> coming up next, why the options market says nike could be gearing up for a 4% move on earnings next week. we got the trade when we come back. ♪ i'm almost done. [ male announcer ] now you can pay your bill... ♪ ...manage your appointments... [ dog barks ] ...and check your connection status... ♪ ...anytime, anywhere. ♪ [ dog growls ] ♪ oh. so you're protesting? ♪ okay. [ male announcer ] introducing xfinity my account. available on any device. >>> great day for nike, but traders are betting the stock is about to run into trouble. dan's got today's action. dan? >> options volume ran about two times daily average with puts outnumbering calls there. there was one big trade there when the stock was abo

whitney tilson is short that stock, on this program, in the "60 minutes" piece. what's happening after stabilization yesterday, because remember an analyst came out yesterday and upgraded the stock said the sell-off was overdone, you have another reversal today, those shares in ll lower at this hour on news that senator bill nelson from the state of florida asking federal agencies to investigate that company. lumber liquidators down 5%. all right. when something unusual happens the najarians try to find it, tried to make some maoney on it >> take a look at red hat down today. people are buying upside calls in here. the 72.50 calls back through the highs to get over 72.50 as you can see. look at the amount of these 7200 of them have traded that's well over open interest. i bought that one today, judge, probably for about two weeks. >> all right. pete, what about you. >> energy 21, exxi. when you look at this name, scott, look at this chart look at the longer term chart. look at where the stock came from. look where it got down to. it's been moving its way up. toda

saying the fears raised by short sellers including whitney tilson on "60 minutes" are overblown, upgradeduy. dave strausser of jenny is the analyst behind the call and joys joins us live from new york city. welcome. >> thank you. >> what leads you to believe that they're overblown? >> well, i think what we have is different testing, different types of testing, that the testing they did on cbs on "60 minutes" is not the testing that you need to do to get certified under the regulations. you know, just to give it to you in a second the testing gets done at the plants in china and it's based on the fiber boards. that's where the reg -- how you get compliance. that's where the compliance issue is and that's where -- that testing lumber liquidators has done and done effectively they've done it by, you know, the way that they're supposed to having a third party certify or do it as well as then having do their own random checks which are not necessary but do it as a second check, and then they do it again as a finished product. so, you know, whereas what they did on "60 minutes" they broke it in

you look at whitney tilson on lumber liquidators. this is a company that is causing harm apparently by using illegal wood but it is cheaper and it is exposing people to formaldehyde. it is a healthy thing for a short seller to identify a company that is defrauding consumers. stephanie: whitney has spent pennies compared to the tens of millions of dollars. you had a former whistleblower who was going to be involved in an abc documentary that you have to pay, you have to backstop that guy. that is a lot different. bill: we manage a lot more capital than whitney. when we spend money on a particular investment, whether it is a hostile takeover or a public short we size the spending and context. we spend a few percentage points of capital here and we think it is going to be a good reward. i have said publicly that if we think it is not a good risk reward, we will cover. we think it is a good risk reward is because we don't need the government to act to make a lot of money here. pyramid schemes pop and then they dropped quickly. herbalife

that he is considering or it's on the table perhaps that they would sue either "60 minutes" or whitney tilsontory and that remains to be seen. >> susan, what would you say? >> i think part of the story here is about knowledge and intent. so i think bill ackman truly believes that herbalife is a ponzi scheme or a pyramid scheme. he can't ever be accused of market manipulation. if he's told people to go ourt and say things that are no longer true that's where you get into the bad plays. he's a true believer and has been for years. >> herb quick last word. >> i think that was the best last word. i'm done. >> we'll leave it there then. susan, thank you so much. scott, thank you for all the work on both of those stories this week. scott wapner and our sue herera joins us for a news update this hour. >> and here is what's happening at this hour. the obama administration said it expects the u.n. security council would endorse any final nuclear power between world powers and iran. a security council vote would be separate from a vote to ease sanctions on iran. >>> boeing's ceo earned some $29 million