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 Last date to be considered as the lead plaintiff in any federal securities class action filed against the Company.
If you have suffered losses exceeding $100,000 Investing in Kornit stock options or stock between February 17, 2021 July 5, 2022and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson You can contact directly At 877-247-4292 Oder 212-983-9330 (Ext. 1310). Click here to get more information. www.faruqilaw.com/KRNT.
There are no costs or obligations.
Faruqi & Faruqi is a leading minority 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 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. The Company had other major customers during the Class period, including Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel and activewear brands. Kornit makes more than 60% of its revenues through its ten largest customers. Kornit’s largest customers account for a significant percentage of its revenues. Therefore, it was essential that Kornit maintains these major customers and continues to grow its customer base in order achieve its ambitious goal to generate a substantial amount of revenue. $1 billion By 2026, revenue will increase by 6%
The complaint alleges that during the Class Period, defendants made many materially false or misleading statements and omissions regarding Kornit’s business and operations. In particular, the Defendants repeated the Company’s competitive advantages and assured investors that there was virtually no competition in the “direct to-garment” printing market. Investors were also assured by Defendants that Kornit’s digital printing system and consumable products (such as textile inks) are in high demand. They also provided services to customers to help them maintain and manage their digital printers and 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 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 began to dawn on 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 was likely to lose revenue from these two customers.
On May 11, 2022Kornit reported an unexpected net loss of $2.2 million despite reporting revenue expectations that were higher than expected. $5.2 Million Comparable to a profit in the first quarter 2022, $5.1 Million In the previous year period. The revenue guidance issued by the Company for its second quarter in 2022 was significantly below analyst 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 MillionThis is well below the revenue guidance of between $85 Million $95 Million The Company had provided less than two months prior to the revenue miss. 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 led to a further decline in the Kornit share price $8.10 Each share is 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 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.
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