Did you lose money in investments with Kornit Digital Ltd.? Visit Kornit Digital Ltd. Contact us for a Shareholder Class Action Lawsuit Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
New York, New York – (Newsfile Corp. – February 9, 2023) – Bernstein Liebhard LLP a nationally acclaimed law firm for investor rights reminds investors about the deadline to file a lead Plaintiff motion in a securities class-action lawsuit that has been filed on behalf shareholders who purchased or obtained ordinary shares of Kornit Digital Ltd. (“Kornit”) KRNT Between February 17, 2021 and August 5, 2022, inclusive (the “Class Period”) The suit was filed in the United States District Court for the District of New Jersey. It alleges violations of the Securities Exchange Act of 1984.
Kornit is a manufacturer of industrial digital printing technologies that are used in the textile, garment, and apparel industries. End-users can print direct-to fabric (“DTF”) or direct-to garment (“DTG”) using the Company’s digital printers. DTG printing is where designs and images can be printed directly onto textiles like clothing and apparel. In DTF printing, large rolls of fabric pass through wide inkjet printers that print images and designs directly on to swaths of fabric that are then cut and sewn into a product, and can be used in the fashion and home décor industries. Kornit also manufactures and sells textile dyes and other supplies for its digital printers. Kornit provides technical support and customer service for its printers through customer support agreements.
Kornit repeatedly spoke out about the alleged competitive advantages it had and assured investors that they faced little competition in the DTG printing industry. Kornit also claimed that customers were in high demand for its digital printing products and consumables such as textile dyes. Kornit also provided services to help them maintain their digital printers and manage customer workflows. Kornit also assured investors that there was strong demand for its products and services, which would allow it to retain its existing customers and attract new ones. This would reduce the risk associated with a large portion of the Company’s revenues being concentrated in a few large customers.
Plaintiff asserts that the statements and others made during the Class Period were false. Kornit and its senior executives were aware, or at least recklessly ignored, the fact that the Company’s digital printer business was plagued in quality control and customer service issues. These issues and deficiencies led Kornit’s to give market share away to competitors. This in turn resulted in a drop in Company revenue as customers switched to digital printing services elsewhere. These misrepresentations led to Kornit’s ordinary shares trading at artificially high prices during the Class Period.
Investors learned the truth about Kornit on March 28, 2022 when Fanatics (Delta Apparel) and Fanatics, two of Kornit’s most important customers, announced that they had for months collaborated with one Kornit’s principal competitors to create a new digital printer technology that directly competed against Kornit’s offerings. Delta Apparel said that it had installed the new technology in four existing digital printing facilities and was planning to expand. Fanatics and Delta Apparel both used the new technology in a rival fashion. It was a reflection of widespread dissatisfaction among Kornit’s most important customers about the Company’s quality of products and customer service.
Kornit reported a net loss for its first quarter 2022. This was despite reporting revenue that exceeded expectations. It had a profit $5.1 million in the previous year period. The revenue guidance issued by the Company for the second quarter 2022 was also significantly lower than analysts’ expectations. Kornit blamed the Company’s disappointing guidance on a slowdown of orders from its customers in the ecommerce segment. Kornit also acknowledged that for the past two quarters, it knew that Delta Apparel was one of its largest customers and had bought digital printing systems form a competitor to Kornit.
This news caused the Kornit ordinary share price to fall $18.78 per shares, or 33.3%, and close at $37.63 on May 11, 2022.
Kornit announced on July 5, 2022 that it would report significant revenue loss for the second quarter in 2022. Kornit expects revenue to range from $56.4 million-$59.4 million for the second period. This is significantly lower than the revenue guidance that Kornit provided in May 2022, which was between $85 and $95 millions. Kornit said that the significant revenue loss was due to “a significantly slower pace in direct-to-garment orders (DTG) system orders in the second quarter compared to our previous expectations.”
The price of Kornit ordinary stock shares dropped $8.10, or 25.7% to close at $23.46 per sa on July 6, 2022.
If you are interested in serving as the lead plaintiff, you must make a motion to the Court no later that April 17, 2023. A lead plaintiff represents a class member and acts on behalf of the other class members when directing litigation. You don’t have to be a lead plaintiff in order to participate in any recovery. If you decide to not take action, you can remain an absent class member.
If you are interested in Kornit ordinary shares purchased or acquired, and/or you would like to discuss legal rights and options Kornit Digital Ltd. Contact Kornit Digital Ltd. Peter Allocco at (212) 951-2030 or [email protected].
Bernstein Liebhard LLP has recouped over $3.5 billion for clients since 1993. Apart from representing investors, the Firm was retained by many of the country’s largest public and private pension funds to monitor and pursue litigation. The Firm’s success in defending hundreds of lawsuits and class actions has earned it a spot on The National Law Journal’s “Plaintiffs’ Hot List” thirteen consecutive times, and a listing in The Legal 500 for ten years.
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