KORNIT DIGITAL LTD. (NASDAQ: KRNT) SHAREHOLDER CLASS ACTION
Did you lose any money from investments in Kornit Digital Visit Kornit Digital Ltd. 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 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. 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 on 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 offers customer support contracts that provide technical support and equipment services to its printers.
Kornit repeatedly spoke out about the alleged competitive advantages of its technology throughout the Class Period and assured investors that they faced little 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 had reported revenues that were 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. Kornit also acknowledged that for the past two quarters, it knew that Delta Apparel was one of its largest customers and had bought digital printing systems form a competitor to Kornit.
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 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.
If you are interested in serving as the lead plaintiff, you must make a motion to the Court no later that 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. If you decide to not take action, you can remain an absent class member.
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. The Firm represents individual investors and has also been retained by the nation’s largest pension funds to monitor their assets and to pursue litigation for them. 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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Contact Information
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
[email protected]
