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 Kornit options and stock can be purchased 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 is no obligation or cost to you.
Faruqi & Faruqi is a leading minority 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 unique eco-friendly technology used by Kornit’s digital inkjet printers allows them to print directly on finished garments as well as large rolls of unfinished material.
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 also expanded its business during the Class Period and started offering software services to customers. This includes a suite end-to-end fulfillment solutions and production solutions called KornitX. The Company offers, among others, automated production systems, workflow, and inventory management.
Amazon.com, Inc. is Kornit’s largest customer. Other large customers of Kornit during the Class Period were Delta Apparel, Inc. (“Delta Apparel”), an apparel and activewear brand, as well Fanatics, Inc. (“Fanatics”), which is a supplier of licensed sports merchandise. 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
The complaint claims that Defendants made a number of materially false and misleading statements regarding Kornit’s operations and business during the Class Period. 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 assured that Kornit’s digital printing technology and consumable products such as textile dyes, are in strong demand. Defendants also stated that the Company offers services to its customers to manage and maintain their digital printers as well as to manage customer workflow. 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 truth, defendants knew or at the very least, disregarding, that Company’s digital printing business was plagued in quality control and customer service issues. 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.
Investors started to realize the truth. 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 preceding year period. Revenue guidance for the second half of 2022 was also released by the company, but it was considerably below analysts’ expectations. Kornit blamed the disappointing guidance on a slowdown of orders from customers in e-commerce. 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 caused Kornit shares’ price to fall by $18.78 Each share is 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 millionsThis 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 led to a further decline in the Kornit share price $8.10 Per share 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). 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 remain confidential.
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