Are you a Kornit Digital investor who has lost capital? Kornit Digital Ltd. is the right place to go if you feel this way. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
NEW YORK, March 20, 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”). The suit was filed in the United States District Court for the District of New Jersey. It alleges that violations of the Securities Exchange Act of 1934 were committed.
Kornit develops and produces industrial digital printing technology for textile, garment and apparel 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 technological advantages it had and promised investors that they faced little competition in DTG printing. Kornit claimed there was strong demand in the market for its DTG printing technology, including consumable products such as textilesinks. It also stated that its services were available to customers who needed them to operate and maintain digital printers. 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 inflated prices for the entire 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. The Company also admitted that it knew for the past two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors.
The price of Kornit’s ordinary shares dropped $18.78 or 33.3% on this news to close at $37.63 pershare on May 11, 2022.
Kornit announced on July 5, 2022 that there would be a substantial revenue gap for the second half of 2022. 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.”
The price of Kornit’s ordinary shares dropped $8.10 or 25.7% to $23.46 per Share on July 6, 2022.
You must apply to the Court by April 17th 2023 if you want to be a lead plaintiff. 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.
If you purchased or acquired Kornit ordinary shares, and/or would like to discuss your legal rights and options please visit Kornit Digital Ltd. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected].
Bernstein Liebhard LLP is a law firm that has helped its clients recover over $3.5 Billion since 1993. Apart from representing investors, Bernstein Liebhard LLP has also been retained to represent pension funds and public institutions. 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
(212) 951-2030