SAN DIEGO, March 07, 2023 (GLOBE NEWSWIRE) — The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons or entities that purchased or otherwise acquired Kornit Digital Ltd. (NASDAQ: KRNT) ordinary shares between February 17, 2021 and July 5, 2022, for violations of the Securities Exchange Act of 1934. Kornit is a manufacturer of industrial digital printing technology for the apparel, garment and textile industries.
What Now? Shareholders who are similarly situated may be eligible to join the class action against Kornit. Shareholders who wish to be the lead plaintiff in the class action must file their papers no later than April 17, 2023. A lead plaintiff is an individual who represents other class members and acts as a mediator in the direction of litigation. To be eligible for a recovery, you don’t have to take part in the case. For more information, click here.
All representation is provided on a contingency basis. Shareholders don’t pay any fees.
What is the Case About Kornit Digital Ltd.
According to the complaint, during the class period, defendants touted the purported competitive advantages provided by its technology and assured investors that it faced virtually no meaningful competition in the “direct-to-garment” printing market. The Company also claimed that there was strong demand in digital printing systems, consumables, and the services Kornit provided to its customers to manage and maintain their digital printers as well as manage customer workflows.
In truth, Kornit and its senior executives knew or, at a minimum, recklessly disregarded, that the Company’s digital printing business was beset by significant quality control problems and deficient customer service. Kornit became more susceptible to the pressure of competitors than it represented, and it lacked the competitive advantage it claimed to have to investors. Those problems and deficiencies caused Kornit to lose market share to competitors, which led to a decline in the Company’s revenues, as Kornit’s dissatisfied customers sought out alternative options for their digital printing needs. Kornit also failed to disclose the fact that there were already risks to quality and customer service, despite the Company claiming to warn about them.
Kornit released its financial results for the first quarter 2022 on May 11, 2022. The net loss was $5.2 million compared with a profit of $5.1million for the quarter 2021. Kornit also stated to investors that the second quarter 2022 would have lower revenue and profitability than anticipated. These disclosures and others caused the Kornit ordinary share price to fall by $18.78 per shared, or 33% to $37.63 per sharing on May 11, 2022.
Kornit then announced preliminary financial results, for the second quarter, on July 5, 2022. The Company revealed that it would have a significant revenue deficit in the second quarter. Kornit anticipated that the second quarter’s revenue would range from $56.4 million to $59.4 millions. That represented a reduction of more than 35% at the midpoint of Kornit’s previous revenue guidance of between $85 million and $95 million that the Company provided less than two months earlier. This news caused the Kornit average share price to fall by $8.10, or 25.7%, and close at $23.46 on July 6, 2022.
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About Robbins LLP. Robbins LLP is a leader in shareholder rights litigation. Since 2002, Robbins LLP’s attorneys and staff have worked tirelessly to help shareholders recover their losses, improve corporate governance structures and hold executives responsible for wrongdoing. To be notified if a class action against Kornit Digital Ltd. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
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