NEW YORK, March 4, 2023 /PRNewswire/ — 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 of the April 17, 2023 Deadline to apply for the position of lead plaintiff in the federal securities class action against the Company
If you have suffered losses exceeding $100,000 Investing in Kornit stock 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 You can contact directly At 877-247-4292 Oder 212-983-9330 (Ext. 1310). For more information, click here www.faruqilaw.com/KRNT.
There are no costs or obligations.
Faruqi & Faruqi is a leading minority And Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
Kornit develops and manufactures digital printing solutions for textile, garment, and apparel 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 also expanded its business during the Class Period and started offering software services to customers. This includes a suite end-to-end fulfillment solutions and production solutions called KornitX. The Company offers, among others, automated production systems, workflow, and inventory management.
Amazon.com, Inc. is Kornit’s largest customer. Other large customers of Kornit during the Class Period were Delta Apparel, Inc. (“Delta Apparel”), an apparel and activewear brand, as well Fanatics, Inc. (“Fanatics”), which is a supplier of licensed sports merchandise. Kornit’s ten largest customers account for more than 60% of its revenue. Kornit’s largest customers account for a significant percentage of its revenues. Therefore, it was essential that Kornit maintains these major customers and continues to grow its customer base to meet its ambitious goal. $1 billion In 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. In particular, the Defendants repeated the Company’s competitive advantages and assured investors that there was virtually no competition in the “direct to-garment” printing market. Investors were assured that Kornit’s digital printers and other consumable products such as textile inks are in strong demand. Defendants also stated that the Company offers services to its customers to manage and maintain their digital printers as well as to 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 problems and deficiencies led Kornit to lose market share to its competitors. This resulted in a decline in revenue for the Company as customers moved to other digital printing companies. Due to Defendants’ misleading statements, Kornit ordinary stock shares traded at artificially elevated prices during the Class Period.
The truth was finally revealed to investors 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 Kornit’s products and services. Kornit would lose revenue from two of the most important customers.
On May 11, 2022Kornit reported a net loss in spite of reporting revenue that exceeded expectations. $5.2 Million For the first quarter in 2022, it was a profit of $5.1 Million In the preceding year period. The revenue guidance issued by the Company for its second quarter in 2022 was significantly lower than analysts’ estimates. Kornit said that the Company’s disappointing guidance was due to slowdown in orders from customers on the ecommerce market. Kornit also acknowledged that the Company knew that Delta Apparel, a competitor to Kornit, had purchased digital printing equipment for at most the past two quarters. These disclosures caused Kornit shares’ price to fall by $18.78 Per share or 33%
Then, on July 5, 2022Kornit stated that it expected to report a significant revenue gap for the second quarter 2022. Kornit forecasted that revenue for the quarter would be between $1.01 and $1.02. $56.4 million To $59.4 millionsThis is well below the revenue guidance of between $85 Million And $95 Million The Company had not provided the Company with a report for two months before. Kornit explained that the Company’s substantial revenue loss was due to “a significantly slower pace for direct-to-garment orders (DTG) in the second quarter compared to our previous expectations.” These disclosures caused Kornit shares’ price to fall by another $8.10 Per share or 25.7%
The court-appointed plaintiff lead is the investor who has the largest financial interest. This is an individual who is appropriate and typical of all class members and who oversees and directs the litigation for 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 right to share in any recovery does not change by whether you are chosen to be the lead 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.
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