Did you lose money in investments with Kornit Digital Ltd.? Kornit Digital Ltd. is the right place to go if you feel this way. Contact us for a Shareholder Class Action Lawsuit Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
NEW YORK, Feb. 16, 2023 (GLOBE NEWSWIRE) — Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the ordinary shares of Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT) between February 17, 2021, and July 5, 2022, inclusive (the “Class Period”). The suit was filed in the United States District Court for the District of New Jersey.
Kornit is a manufacturer of industrial digital printing technologies that are used in the textile, garment, and apparel industries. The Company’s digital inkjet printers enable end-users to print both direct-to-garment (“DTG”) and direct-to-fabric (“DTF”). DTG printing is where designs and images can be printed directly onto textiles like clothing and apparel. In DTF printing, large rolls of fabric pass through wide inkjet printers that print images and designs directly on to swaths of fabric that are then cut and sewn into a product, and can be used in the fashion and home décor industries. Kornit also manufactures and sells textile dyes and other supplies for its digital printers. Kornit provides technical support and customer service for its printers through customer support agreements.
Kornit repeated its claims of competitive advantages and assured investors that there was virtually no competition in DTG printing. Kornit also claimed that customers were in high demand for its digital printing products and consumables such as textile dyes. Kornit also provided services to help them maintain their digital printers and manage their customer workflows. Kornit further assured investors that the purportedly strong demand for the Company’s products and services would enable it to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.
Plaintiff asserts that the statements and others made throughout this Class Period were false. In truth, Kornit and its senior executives knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. These misrepresentations led to Kornit’s ordinary shares trading at artificially high prices during the Class Period.
Investors began to learn the truth on 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 products and services Kornit offered. Delta Apparel stated that the new technology was already in place in four of its digital printing facilities, and plans to continue expanding. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected the widespread dissatisfaction of Kornit’s major customers with the Company’s product quality and customer service, and meant that Kornit would likely lose revenue from two of its most important customers.
Kornit reported a net profit of $5.1million for the year 2022. However, it reported revenue that was higher than expected. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts’ expectations. Kornit attributed its disappointing guidance to a slowdown in orders from the Company’s customers in the e-commerce segment. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors.
The price of Kornit ordinary stock shares fell $18.78, or 33.3% to close at $37.63 per sa on May 11, 2022.
Kornit then announced that it would report a significant revenue shortfall for the second quarter 2022 on July 5, 2022 after the market had closed. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 millions. This is far below the $85 million to $95 million revenue guidance the Company gave less than two months ago, in May 2022. Kornit attributed the substantial revenue miss to “a significantly slower pace of direct-to-garment (DTG) systems orders in the second quarter as compared to our prior expectations.”
The price of Kornit ordinary stock shares dropped $8.10, or 25.7% to close at $23.46 per sa on July 6, 2022.
You must apply to the Court by no later than April 30, if you want to be named as the lead plaintiff April 17, 2023. A lead plaintiff represents a class member and acts on behalf of the other class members when directing litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. You can choose not to take any action and you could remain an absent member of the class.
If you are interested in Kornit shares were purchased or acquired. Kornit Digital Ltd. Contact Kornit Digital Ltd. Peter Allocco at (212) 951-2030 or [email protected].
Bernstein Liebhard LLP, has recovered more than $3.5 billion on behalf of its clients since 1993. Apart from representing investors, the Firm was retained by many of the country’s largest public and private pension funds to monitor and pursue litigation. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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