NEW YORK, March 18, 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 apply for the position of lead plaintiff in the federal securities class action against the Company
You suffered losses of more than $100,000 Kornit stocks and options 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). Click here to get more details. www.faruqilaw.com/KRNT.
You are not required to pay any fees.
Faruqi & Faruqi is a leading minority Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
Kornit develops and produces industrial digital printing solutions that are suitable for garment, apparel and textile industries. Its unique eco-friendly technology allows it to print both on the finished garments and large rolls unfinished fabric.
Sales of both its printing systems and textile inks as well as other consumable products used in the Company’s digital printers generate revenue. Kornit provides technical support and maintenance services as well as customer assistance to printer end-users. Kornit also expanded its business during the Class Period and started offering software services for its customers. This includes a range of end-to–end fulfillment and production solutions called KornitX. The Company offers, among others, automated production systems, workflow, and inventory management.
Amazon.com, Inc. is Kornit’s biggest customer. Other large customers of Kornit during the Class Period were Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel brands that offer activewear, and licensed merchandise. Kornit makes more than 60% of its revenue from the ten largest customers. Kornit has a substantial portion of its revenue coming from the ten largest customers. Therefore, it is crucial that Kornit maintains these major customers in order to reach its ambitious goal of creating 60,000 new customers. $1.25 billion In revenue by 2026
The complaint alleges that during the Class Period, defendants made many materially misleading statements and omissions regarding Kornit’s business and operations. In particular, the Defendants repeated the Company’s competitive advantage and assured investors there was virtually no competition in “direct to-garment” printing. Investors were assured that Kornit’s digital print systems, consumables (such as inks for textiles), and the Company’s services for maintaining and managing its digital printers as well as managing customer workflows are in high demand. Investors were further assured that Kornit would be able to retain its current customer base as well as attract new ones by the Company’s high demand for its products and services. It would also limit the potential risks of a large portion of its revenue being concentrated with only a handful of large customers.
In fact, defendants knew or, at the very least, disregard that Company’s digital printer business had severe quality control and customer service problems. These problems and shortcomings caused Kornit’s market share to be ceded to other competitors. This resulted in a decline in revenue for the Company as its customers moved elsewhere to get their digital printing needs met. Due to Defendants’ misrepresentations Kornit ordinary stock shares trade at artificially inflated prices all through the Class Period.
The truth was finally revealed to investors February 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 was likely to lose two of its largest customers.
You can find more information here April 11, 2022Kornit posted a net loss in spite of reporting revenue that was higher than expected. $5.2 Million Comparable to a profit in the first quarter 2022 $5.1million In the previous year period. Revenue guidance was also released by the Company for the second quarter 2022, which was considerably below analyst expectations. Kornit blamed the disappointing guidance on a slower pace of orders received from customers within the e-commerce marketplace. Kornit also acknowledged that the Company knew, at least for the last two quarters of the year, that Delta Apparel had purchased digital printing equipment from a Kornit competitor. The disclosures led to a decline in the Kornit share price $18.78 Per share or 33%
Then, on July 5, 2022Kornit declared that there would be a large revenue shortfall in the second quarter 2022. Kornit forecasted that revenue would be between $1.25 and $2.50 for the quarter. $56.4 Million You can find more information here $59.4 millionsThis is well below the revenue guidance for between $85,000,000 $95 Million Two months prior, the Company was able to provide less revenue. Kornit explained that the Company’s substantial revenue loss was due to “a substantially slower pace for direct-to-garment orders (DTG), in the second quarter than our previous expectations.” Kornit’s shares fell further after these disclosures. $8.10 Each share is 25.7%
The lead plaintiff appointed by the court is an investor who has the greatest financial interest in the class’s relief. He or she is a typical class member and directs and monitors the legal proceedings on behalf of the proposed class. The Court may appoint any member of the class to act as the lead plaintiff. They can also choose not to participate in the litigation and be an absent member. The decision to be a lead plaintiff does not affect your ability to share any recovery.
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 foretell a similar outcome in future matters. Your case will be discussed with us. We will treat all communications in confidence.
SOURCE Faruqi & Faruqi, LLP
