Kraton Corporation Accused of Misleading Investors About its Product

On October 25, 2017, Kraton Corporation (NYSE: KRA) stated in a conference call regarding its third quarter of 2017 earnings that the company was producing Cariflex, a polyisoprene product, at its plant in Brazil and that Cariflex was available to customers. However, Kraton didn’t mention that certain customers had already rejected its Brazilian-produced Cariflex. On February 21, 2018, Kraton revealed that some of its customers experienced processing issues with its Brazilian-produced Cariflex during the fourth quarter of 2017, and that in certain cases the material was returned to Kraton for evaluation. Kraton further admitted that the resulting negative financial impact to its fourth quarter 2017 operating income including its Adjusted EBITDA was $7.6 million. On this news, Kraton's stock fell $7.69 per share, or over 15%, to close at $43.10 per share on February 21, 2018.

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