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, New York – (Newsfile Corp. – March 23, 2023) – Bernstein Liebhard LLP is a nationally acclaimed investor right law firm. It reminds investors that the deadline for filing a lead plaintiff motion in a Securities Class Action lawsuit has been filed on behalf investors who bought or acquired ordinary shares of Kornit Digital Ltd. (“Kornit”) or the “Company”). KRNT Between February 17, 2021 and August 5, 2022, inclusive (the “Class Period”) The lawsuit 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. End-users can print direct-to fabric (“DTF”) or direct-to garment (“DTG”) using the Company’s digital printers. DTG printing allows designs and images to be printed directly on finished textiles, such as apparel and clothing. 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 repeatedly spoke out about the alleged competitive advantages it had and assured investors that they faced little competition in the DTG printing industry. 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 customer workflows. Kornit assured investors that it would be able to maintain its customer base and attract new customers due to the company’s strong demand. It also said that this would help limit the risks associated concentrating a significant portion of its revenues on a small number large customers.
Plaintiff claims that similar statements were made during the Class Period. Kornit’s senior executives knew or, at the very least, disregard that the Company’s digital printing business was plagued with severe quality control issues and customer service shortcomings. These issues and deficiencies caused Kornit’s market share to be ceded to competitors. This in turn led to a decrease of revenue for the Company, as customers moved elsewhere to get their digital printing needs met. These misrepresentations led to Kornit’s ordinary shares trading at artificially high prices during the Class Period.
Investors first learned the truth when Fanatics and Delta Apparel, two of Kornit’s largest customers, announced on March 28th 2022 that they had been working with one of Kornit’s main competitors to create a digital printing technology that directly competes with Kornit’s products and services. Delta Apparel stated that the new technology was already in place in four of its digital printing facilities, and plans to continue expanding. Fanatics and Delta Apparel used this competing technology to reflect the dissatisfaction expressed by Kornit’s major clients with its product quality and customer service. This meant that Kornit would lose revenue from two of the most important customers.
Kornit reported a net loss for its first quarter 2022. This was despite reporting revenue that exceeded expectations. It had a profit $5.1 million in the previous year period. The Company issued revenue guidance for 2022, which was considerably below analysts’ expectations. Kornit blamed the Company’s disappointing guidance on a slowdown of orders from its customers in the ecommerce segment. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors.
This news caused the Kornit ordinary share price to fall $18.78 per shares, or 33.3%, and close at $37.63 on May 11, 2022.
Kornit announced on July 5, 2022 that it would report significant revenue loss for the second quarter in 2022. Kornit expects revenue to range from $56.4 million-$59.4 million for the second period. This is significantly lower than the revenue guidance that Kornit provided in May 2022, which was between $85 and $95 millions. Kornit said that the significant revenue loss was due to “a significantly slower pace in direct-to-garment orders (DTG) system orders in the second quarter compared to our previous 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 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. However, your ability to share in any recovery does not require you to serve as a lead plaintiff. You can choose not to take any action and you could remain an absent member of the class.
If you Kornit ordinary shares purchased or acquired, and/or you would like to discuss legal rights and options Kornit Digital Ltd. Contact Kornit Digital Ltd. Peter Allocco at (212) 951-2030 or [email protected].
Bernstein Liebhard LLP has recouped over $3.5 billion for 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. The Firm’s success in defending hundreds of lawsuits and class actions has earned it a spot on The National Law Journal’s “Plaintiffs’ Hot List” thirteen consecutive times, and a listing in The Legal 500 for ten years.
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Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
[email protected]
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