James Wilson (Securities Litigation Partner) Encourages Investors to Contact Him Directly If They Have Suffered Losses Exceeding 100,000 In Kornit
New York, New York—-(Newsfile Corp., April 2, 2023) Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Kornit Digital Ltd. (“Kornit ” or the “Company”) KRNT Investors are reminded that the deadline for claiming the role of lead plaintiff in the federal securities class action against the Company is April 17, 2023.
You can lose more than $100,000 if you invest in Kornit options or stock between February 17, 2021, and July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly At 877-247-4292 Or 212-983-9330 (Ext. 1310). Click here to get more information. www.faruqilaw.com/KRNT.
There is no obligation or cost to you.
Faruqi & Faruqi is a leading minority and Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
Kornit is a manufacturer of industrial digital printing solutions that are used in the apparel, textile and garment industries. The unique eco-friendly technology used by Kornit’s digital inkjet printers allows them to print directly on finished garments as well as large rolls of unfinished material.
The Company’s revenues come from the sale of its printing systems, as well as textile inks or other consumables for its digital printers. Kornit offers customer support and equipment services to its end-users. This includes technical support, maintenance, repair, and technical support. Kornit began offering software services during the Class Period. These include a suite called KornitX that provides end-to–end fulfillment and production solutions.
Amazon.com, Inc., is Kornit’s largest customer. Other major customers for Kornit in the Class Period include Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel and activewear brands. Kornit receives over 60% of its revenues through its ten largest customers. Kornit has a large share of its revenues concentrated with its top customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of $1 billion revenue by 2026.
The complaint alleges that during the Class Period, defendants made many materially false or misleading statements and omissions regarding Kornit’s business and operations. Particularly, Defendants repeatedly praised Kornit’s technological advantages and promised investors that they faced little competition in “direct-to–garment” printing. Investors were also assured by Defendants that Kornit’s digital printing system and consumable products (such as textile inks) are in high demand. They also provided services to customers to help them maintain and manage their digital printers and manage customer workflows. Investors were further assured by the defendants that Kornit would be able to maintain its existing customer base as well as attract new customers due to the high demand for its products. They also stated that Kornit would not have significant risks associated with large portions of its revenues being concentrated within a small number.
In reality, the Defendants knew or at least recklessly ignored that the Company’s digital printer business was plagued with quality control issues and poor customer service. These issues and deficiencies caused Kornit’s market share to be ceded to competitors. In turn, this led to a decrease of revenue for the Company, as customers turned elsewhere for digital printing services. Due to Defendants’ misleading statements, Kornit ordinary stock shares traded at artificially elevated prices during the Class Period.
Investors first learned the truth about Kornit on March 28, 2022 when 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 printing technique that directly competed against Kornit’s products. Kornit was likely to lose revenue from its two 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 released revenue guidance for the 2nd quarter of 2022, which was significantly below analysts’ expectations. Kornit blamed the disappointing guidance on a slowdown of orders from customers in e-commerce. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors. These disclosures resulted in Kornit shares falling by $18.78 per ounce, or 33%.
Kornit then announced, July 5, 2022 that it would report a significant revenue gap for the second quarter 2022. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 millions, which is significantly lower than the $85 million to $95 million revenue guidance the Company gave less than two months ago. Kornit explained that the significant revenue loss was due to “a significantly slower pace in direct-to-garment orders (DTG),” compared to previous expectations. These disclosures caused Kornit shares’ price to fall by an additional $8.10/share, or 25.7%.
The court-appointed plaintiff lead is the investor who has the largest financial interest. This is an individual who is adequate and typical for class members and who oversees the litigation in favor of the putative classes. Any member or potential class member may petition the Court to be appointed lead plaintiff by counsel of their choosing, or they may remain absent and choose not to act. Your ability to share any recovery is not affected whether you serve as a leading plaintiff.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Kornit’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
Attorney Advertising. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Precedent results are not indicative of a similar outcome in future matters. We would love to have a discussion about your case. All communications will remain confidential.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/160814