Astec Industries, Inc. (ASTE) Accused of Misrepresenting Capability of Its Wood Pellet Plants

According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1934 between July 26, 2016 and October 22, 2018, Astec Industries, Inc. (ASTE) represented itself as the world's only single-source complete wood pellet manufacturer and noted that it could produce saleable pellets months ahead of what any competitor could accomplish. Despite these assurances, Astec's pellet plants suffered from significant and costly problems that prevented them from running at their promised production capacity, posing a threat to the company's financial performance and outlook. Astec surprised the market when it announced in July 2018 that it was substantially limiting its wood pellet business and giving up on its plans to engineer and develop its wood pellet plant in Arkansas. Astec again disappointed investors when it revealed in October 2018 that third quarter 2018 financial results fell short of expectations. Since news of Astec's troubles became public, the company's stock price has fallen over 41%, and has yet to recover.

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