NEW YORK, April 08, 2023 (GLOBE NEWSWIRE) — Pomerantz LLP is investigating claims on behalf of investors of Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT). Investors in this category are encouraged to contact Robert S. Willoughby, [email protected], or 888-476-6529 ext. 7980.
Kornit and some of its officers and/or director are under investigation for securities fraud or other illegal business practices.
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On March 28, 2022, 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 said that it had installed the new technology in four existing digital printers and was planning to expand. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected 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 then reported that, despite reporting higher revenues than anticipated, it suffered a net loss in the first quarter of 2022 of $5.2million. This compares to a profit for the same period last year 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. 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.
On this news, Kornit’s stock price fell $18.78 per share, or 33.3%, to close at $37.63 per share 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 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 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.”
On this news, Kornit’s stock price fell $8.10 per share, or 25.7%, to close at $23.46 per share on July 6, 2022.
With offices in New York and Paris, the Pomerantz Firm is recognized as one of the most respected firms in antitrust, corporate and securities class litigation. The Pomerantz Firm was founded by Abraham L. Pomerantz who is known as the dean in class action law. It pioneered the field for securities class actions. The Pomerantz Firm, which has been in existence for more than 80 years, continues to fight for victims of securities fraud, corporate misconduct, and breaches of fiduciary duties. On behalf of class members, the Firm has secured numerous multimillion-dollar damages awards. See www.pomerantzlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
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