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NEW YORK, March 06, 2023 (GLOBE NEWSWIRE) — Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the ordinary shares of Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT) between February 17, 2021, and July 5, 2022, inclusive (the “Class Period”). It was brought to the United States District Court for the District of New Jersey. The suit alleges violations of the Securities Exchange Act of 1935.
Kornit is a manufacturer of industrial digital printing solutions for the apparel, textile and garment industries. The Company’s digital inkjet printers enable end-users to print both direct-to-garment (“DTG”) and direct-to-fabric (“DTF”). Design and images are directly printed onto textiles using DTG printing. In DTF printing, large rolls of fabric pass through wide inkjet printers that print images and designs directly on to swaths of fabric that are then cut and sewn into a product, and can be used in the fashion and home décor industries. Kornit produces and sells textile dyes and other products for digital printers. Kornit offers customer service contracts that provide technical support and other services to its printers.
Kornit repeatedly emphasized the perceived competitive advantage of its technology throughout the Class Period and promised investors it had virtually no competition in DTG printing. Kornit also claimed that customers were in high demand for digital printing equipment, consumables such as textile dyes, aswell as services Kornit offered to help them maintain their digital printers and handle customer workflows. Kornit further assured investors that the purportedly strong demand for the Company’s products and services would enable it to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.
Plaintiff asserts that similar statements throughout the Class Period were also false. In truth, Kornit and its senior executives knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. Because of this misrepresentation, Kornit Ordinary Shares traded at artificially high rates throughout the Class Period.
Investors began to learn the truth on 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 products and services Kornit offered. Delta Apparel stated that the new technology was already in place at four of its digital printing facilities, and plans to continue expanding. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected the 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 posted a net loss for its first quarter in 2022. This was despite reporting revenue that exceeded expectations. It had a profit $5.1 million over the previous year. 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 at least two quarters the Company knew that Delta Apparel was one of the Company’s largest customers and had bought digital printing equipment from a competitor to Kornit.
The price of Kornit’s ordinary shares dropped $18.78 or 33.3% to $37.63 per Share on May 11, 2022.
Kornit then announced that the company would have a significant revenue shortfall for the second quarter 2022 on July 5, 2022 after the markets closed. Kornit expects revenue to range between $56.4million and $59.4million for the quarter. This is significantly lower than the revenue guidance that Kornit provided in May 2022, when it was providing $85 million to $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.”
This news caused the Kornit average share price to fall $8.10, or 25.7%, and close at $23.46 on July 6, 2022.
You must apply to the Court by no later than April 30, if you want to be the lead plaintiff April 17, 2023. The lead plaintiff represents a class member and acts on their behalf in the direction of litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. You can choose not to act and you could remain an absent member of the class.
You can also find out more about our products. Kornit Ordinary Shares purchased, or acquired. Kornit Digital Ltd. You can contact Kornit Digital Ltd. for a Shareholder Class Action Lawsuit Peter Allocco at (212) 951-2030 or [email protected].
Bernstein Liebhard LLP, has recovered more than $3.5 billion on behalf of its clients since 1993. Apart from representing investors, Bernstein Liebhard LLP has been retained to represent pension funds and public institutions. They monitor and litigate on behalf of their clients. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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Contact information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
[email protected]
