Did you lose money in investments with Kornit Digital Ltd.? Kornit Digital Ltd. is the right place to go if you feel this way. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
NEW YORK, April 03, 2023 (GLOBE NEWSWIRE) — Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the ordinary shares of Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT) between February 17, 2021 and July 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 1935.
Kornit develops and manufactures digital printing technology for the apparel, textile, and garment industries. The Company’s digital inkjet printers enable end-users to print both direct-to-garment (“DTG”) and direct-to-fabric (“DTF”). 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 sells textile inks, and other consumables to use with its digital printers. Kornit provides technical support, repair, and customer assistance 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 claimed that its digital printing systems, consumables, such as inks for textiles, were in strong demand. It also offered services to customers to manage digital printer workflows and maintain digital printers. Kornit further assured investors that the purportedly strong demand for the Company’s products and services would enable it to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.
Plaintiff claims that similar statements were made during the Class Period. In truth, Kornit and its senior executives knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. Because of these false representations, Kornit ordinary shares were traded at artificially elevated prices throughout the Class Period.
Investors began to learn the truth on March 28, 2022, when Delta Apparel and Fanatics – two of Kornit’s major customers – announced that for months they had collaborated with one of Kornit’s principal competitors to develop a new digital printing technology that directly competed with products and services Kornit offered. Delta Apparel stated that the new technology was already in place in four of its digital printing facilities, and plans to continue expanding. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected the widespread dissatisfaction of Kornit’s major customers with the Company’s product quality and customer service, and meant that Kornit would likely lose revenue from two of its most important customers.
Kornit reported a net loss for its first quarter 2022, even though it had reported revenues exceeding expectations. This compares to a profit in the previous year period of $5.1million. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts’ expectations. Kornit attributed its disappointing guidance to a slowdown in orders from the Company’s customers in the e-commerce segment. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors.
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 then announced that it would report a significant revenue shortfall for the second quarter 2022 on July 5, 2022 after the market had closed. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 millions. This is far below the $85 million to $95 million revenue guidance the Company gave less than two months ago, in May 2022. Kornit attributed the substantial revenue miss to “a significantly slower pace of direct-to-garment (DTG) systems orders in the second quarter as compared to our prior 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.
To be considered for the role of lead plaintiff, you must make a motion to the Court no later then April 17, 2023. A lead plaintiff acts as a representative of the class and directs the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you decide to not take action, you can remain an absent member.
If you purchased or acquired Kornit ordinary shares, and/or would like to discuss your legal rights and options please visit Kornit Digital Ltd. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected].
Bernstein Liebhard LLP, has recovered more than $3.5 billion on behalf of its clients since 1993. Apart from representing investors, the Firm was retained by many of the nation’s most powerful public and private pension funds to monitor and litigate their assets. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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