NEW YORK, March 11, 2023 /PRNewswire/ — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Kornit Digital Ltd. (“Kornit ” or the “Company”) (NASDAQ: KRNT) and reminds investors of the April 17, 2023 Deadline for applying to be the lead plaintiff in a federal class action that has been brought against the Company.
If you have suffered losses exceeding $100,000 Kornit options and stock can be purchased between February 17, 2021 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 Or 212-983-9330 (Ext. 1310). For more information, click here www.faruqilaw.com/KRNT.
There is no obligation or cost to you.
Faruqi & Faruqi is a leading minority 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 Company’s unique eco-friendly technology allows them to print directly onto both finished garments, as well on large rolls unfinished fabric.
The Company makes revenue through the sales of its printing equipment, textile inks, and other consumables that can be used in its digital printers. Kornit provides technical support, maintenance and repair services as well as customer assistance to end-users. 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 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 generates a large portion of its revenues from its largest customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of generating 80% of its revenue. $1 billion By 2026, revenue will increase by 6%
According to the complaint, defendants made many materially false and misleading statements about Kornit’s operations and business during the Class Period. 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 their customer workflows. Investors were also assured by Defendants that Kornit’s strong demand for its products and services would allow it to retain its existing customers and attract new ones. This would reduce the risk associated with a large portion of its revenues being concentrated in a few large customers.
In reality, defendants knew or, at the very least, disregard that Company’s digital printing business was plagued in quality control and customer service issues. 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 switched to digital printing services elsewhere. Due to Defendants’ misleading statements, Kornit ordinary stock shares were trading at artificially high 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 Comparable to a profit in the first quarter 2022, $5.1 million In the previous year period. Revenue guidance was also issued by the Company for the second quarter 2022, which was significantly lower than 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 caused Kornit shares’ price to fall by $18.78 Each share is 33%
Then, on July 5, 2022Kornit declared that it would report significant revenue loss for the second quarter in 2022. Kornit forecasted that revenue for the quarter would be between $1.01 and $1.02. $56.4 million To $59.4 MillionThis is well below between the previous revenue guidance. $85 million $95 Million The Company had provided less than two months prior to the revenue miss. 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 led the 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 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 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.
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