James Wilson (Securities Litigation Partner) Encourages Investors to Contact Him Directly If They Have Suffered Losses Exceeding 100,000 In Kornit
New York, New York—-(Newsfile Corp., February 26, 2023) 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 seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
You can lose more than $100,000 if you invest in Kornit options or stock between February 17, 2021, and July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly 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 is a manufacturer of industrial digital printing solutions that are used in the apparel, textile and garment industries. The Company’s unique eco-friendly technology allows them to print directly onto both finished garments, as well on large rolls unfinished fabric.
The Company makes revenue through the sales of its printing equipment, textile inks, and other consumable products that can be used in 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 major customers for Kornit in the Class Period include Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel and activewear brands. Kornit’s ten largest customers account for more than 60% of its revenue. Kornit has a large share of its revenues concentrated with its top customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of $1 billion 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 maintain and monitor their digital printers as well as to manage customer workflows. Investors were also assured by Defendants that Kornit’s strong demand for its products and services would allow it to retain its existing customers and attract new ones. This would reduce the risk associated with a large portion of its revenues being concentrated in a few large customers.
In reality, defendants knew, or at the very least, disregard, that Company’s digital printing business was plagued in severe quality control problems, and customer service deficiencies. These issues and deficiencies caused Kornit’s market share to be ceded to competitors. In turn, this led to a decrease of revenue for the Company, as customers went to other places to print their digital printing requirements. Due to Defendants’ misleading statements, Kornit ordinary stock shares traded at artificially elevated prices during the Class Period.
Investors learned the truth when Fanatics and Delta Apparel, two of Kornit’s largest customers, announced that they had been working with one of Kornit’s main competitors for months to develop a digital printing technology that directly compared to Kornit’s products and services. Kornit was likely to lose revenue from its two most important customers.
Kornit reported a net profit of $5.1million for the year 2022. However, it had reported revenues that were higher than expected. The revenue guidance issued by the Company for the second quarter 2022 was also significantly lower than analysts’ expectations. Kornit said that the Company’s disappointing guidance was due to slowdown in orders from customers on the ecommerce market. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors. These disclosures led to a 33% drop in the Kornit share price by $18.78 per Share.
Kornit then announced, July 5, 2022 that it would report a significant revenue gap for the second quarter 2022. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 millions, which is significantly lower than the $85 million to $95 million revenue guidance the Company gave less than two months ago. Kornit said that revenue fell due to “a slower pace of direct to-garment (DTG), systems orders in the second quarter than we had anticipated.” These disclosures caused Kornit shares’ price to fall by $8.10 per ounce, or 25.7%.
The court-appointed lead plaintiff, who has the greatest financial interest in the relief sought for the class and is typical of class members, directs and supervises the litigation on behalf the putative class. Any member of the putative group may request the Court to appoint a lead plaintiff through any counsel they choose, or can opt to remain an absent member of the class and do nothing. 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). Precedent results are not indicative of a similar outcome in future matters. We would love to have a discussion about your case. All communications will remain confidential.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/156109