NEW YORK, March 4, 2023 /PRNewswire/ — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Kornit Digital Ltd. (“Kornit ” or the “Company”) KRNT It reminds investors about the April 17, 2023 Deadline for applying to be the lead plaintiff in a federal class action that has been brought against the Company.
If you have suffered losses exceeding $100,000 Kornit options and stock 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). For more information, click here 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 its customers. 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’s ten largest customers account for more than 60% of its revenue. Kornit generates a large portion of its revenues from its largest customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of generating 80% of its revenue. $1 Billion In revenue by 2026
According to the complaint, defendants made numerous misleading and materially false statements regarding Kornit’s business operations during the Class Period. 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 help manage and maintain their digital printers. Investors were further assured by the defendants that Kornit would be able to maintain its existing customer base as well as attract new customers due to the high demand for its products. They also stated that Kornit would not have significant risks of its revenues being concentrated with large customers.
In reality, the Defendants knew or at least recklessly ignored that the Company’s digital printer business was plagued with quality control issues and poor customer service. These issues and deficiencies led Kornit’s loss of market share to rivals, which in turn resulted in lower revenue for the Company. Customers went elsewhere to get their digital printing needs. Due to Defendants’ misleading statements, Kornit ordinary stock shares traded at artificially elevated prices during the Class Period.
The truth was finally revealed to 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 a net loss in spite of reporting revenue that exceeded expectations. $5.2 Million For the first quarter in 2022, it was a profit of $5.1 Million in the preceding year period. Revenue guidance was also issued by the Company for the second quarter 2022, which was 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 the Kornit shares price to fall by $18.78 Each share is 33%
Then, on July 5, 2022Kornit stated that it expected to report a significant revenue gap for the second quarter 2022. Kornit forecasted that revenue for the quarter would be between $1.01 and $1.02. $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 stated that the significant revenue decline was due to “a substantially slower pace of direct to-garment (DTG), systems orders in quarter two than our expectations.” These disclosures caused Kornit shares’ price to fall by another $8.10 Each share is 25.7%
The court-appointed plaintiff lead is the investor who has the largest financial interest. This is an individual who is typical and adequate for class members and who oversees the litigation in favor of the putative classes. 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 ability to share any recovery is not affected whether you serve as a leading 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). The past results don’t guarantee or predict the outcome of any future matter. We are happy to discuss your individual case. All communications will be treated confidentially.
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