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 to become the lead plaintiff in a federal class action for securities against the Company
You suffered losses exceeding $100,000 Kornit options and stock can be purchased between February 17, 2021 And July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson Direct at 877-247-4292 Oder 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 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 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 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. Particularly, Defendants repeatedly praised Kornit’s technological advantages and promised investors that they faced little competition in “direct-to–garment” printing. 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 retain 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 from a portion of its revenues being concentrated with large customers.
In truth, defendants knew or at the very least, disregarding, that Company’s digital printing business was plagued in quality control and customer service issues. 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. Because of the misrepresentations by Defendants, Kornit’s ordinary shares were traded at artificially high prices throughout 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 an unexpected net loss of $2.2 million despite reporting revenues exceeding 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 also significantly lower than the analysts’ expectations. 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 for at most the past two quarters that Delta Apparel purchased digital printing equipment from a Kornit competitor. These disclosures led to a decline in the Kornit share price $18.78 Per share or 33%
Then, on July 5, 2022Kornit declared that it would report significant revenue loss for the second quarter in 2022. Kornit expects revenue to reach between $200,000 and $35,000 for the second quarter. $56.4 Million To $59.4 millionsThis is far below the prior revenue guidance of between $85 million And $95 Million The Company provided less revenue than it had two months ago. 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 Each share is 25.7%
The court-appointed plaintiff lead is the investor who has the largest financial interest. This is an individual who is sufficient 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 a 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). The past results don’t guarantee or predict the outcome of any future matter. We are happy to discuss your individual case. All communications will remain confidential.
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