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 Time limit to become the lead plaintiff in any federal securities class-action that has been brought against the Company
You suffered losses of more than $100,000 Investing in Kornit options or stock is possible between February 17, 2021 July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson Direct At 877-247-4292 Oder 212-983-9330 (Ext. 1310). Click here to get more details. www.faruqilaw.com/KRNT.
It is free and you are under no obligation.
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 products for textile, garment and apparel industries. Its unique eco-friendly technology allows it to print both on the finished garments and large rolls unfinished fabric.
Revenue is generated by the sale of printing systems, textile inks and consumables for its digital printers. Kornit offers customer service and technical support to its end-users. This includes repair, maintenance and technical support. Kornit began to offer software services during the Class period. These include a complete suite of production and fulfillment solutions, called KornitX. It provides automated workflows and inventory management, as well as production and workflow systems.
Amazon.com, Inc. is Kornit’s biggest customer. Other major customers for Kornit in the Class Period include Delta Apparel, Inc., an apparel and activewear company (“Delta Apparel”), Fanatics, Inc. (“Fanatics”), which provides licensed sports merchandise. Kornit’s ten biggest customers account for more than 60%. Kornit generates a large portion of its revenues from its biggest customers. It was therefore crucial for the Company to maintain these customers as well as expand their customer base to meet its ambitious goal. $1 Billion By 2026, revenue will increase by 6%
The complaint claims that Defendants have made numerous misleading and materially false statements about Kornit’s operations and business during the Class Period. In particular, the Defendants repeated the Company’s competitive advantage and assured investors there was virtually no competition in “direct to-garment” printing. Investors were assured that Kornit’s digital print systems, consumables (such as inks for textiles), and the Company’s services for maintaining and managing its digital printers as well as managing customer workflows are in high demand. Investors were further assured that Kornit would be able to retain its current customer base as well as attract new ones by the Company’s high demand for its products and services. It would also limit the potential risks of a large portion of its revenue being concentrated with only a handful of large customers.
In fact, defendants knew or, at the very least, disregard that Company’s digital printer business had severe quality control and customer service problems. These issues and deficiencies caused Kornit evict competitors from the market, which in turn led to decreased revenue. Customers went to digital printers elsewhere. Due to Defendants’ misrepresentations Kornit ordinary stock shares trade at artificially inflated prices all through 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 could lose revenues from its two most valuable customers.
You can find more information here May 11, 2022Kornit lost a net of $2.2 million despite reporting higher revenues than anticipated. $5.2 Million Comparable to a profit in the first quarter 2022 $5.1million In the previous year period. In addition, revenue guidance issued by the company for 2022’s second quarter was substantially below expectations of analysts. Kornit blamed the disappointing guidance on a slower pace of orders received from customers within the e-commerce marketplace. Kornit also acknowledged that the Company knew, at least for the last two quarters of the year, that Delta Apparel had purchased digital printing equipment from a Kornit competitor. This disclosure caused Kornit shares prices to fall by $18.78 Each share is 33%
Then, on July 5, 2022Kornit declared that there would be a large revenue shortfall in the second quarter 2022. Kornit expects revenue to reach between $200,000 and $35,000 for the second quarter. $56.4 Million You can find more information here $59.4 MillionThis is well below the revenue guidance for between $85 Million $95,000,000 The Company had provided less than two years earlier. Kornit stated that there was a significant drop in revenue due to “a slower pace of orders for DTG systems (direct-to-garment) system products during the second quarter compared with our expectations.” Kornit’s shares fell further after these disclosures. $8.10 Each share is 25.7%
A court-appointed plaintiff leads and supervises litigation for the benefit of the potential class. This is usually the most typical and adequate class member. The Court may appoint any member of the class to act as the lead plaintiff. They can also choose not to participate in the litigation and be an absent member. You can still share in the recovery regardless of whether or not 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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