Lead Plaintiff Deadline 04/17/2023
Kornit Digital Ltd.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the District of New Jersey on behalf of those who acquired Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT) securities during the period from February 17, 2021 through July 5, 2022 (the “Class Period”). Investors have until April 17, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Kornit Digital Ltd manufactures digital inkjet printers, which are used by the textile industry to print directly onto cloth.
On May 11, 2022, Kornit reported its financial results for the first quarter of 2022 and held a conference call with analysts and investors to discuss those results. Kornit reported a net loss of $5.2 million, compared to a profit of $5.1 million for the first quarter of 2021. The Company also told investors to expect Kornit to generate between $85 million and $95 million of revenues in the second quarter of 2022, which, at the midpoint, was $13 million below analysts’ expectations. Moreover, Defendant Ronen Samuel, Kornit’s CEO, admitted that, for at least the previous two quarters, Kornit knew that Delta Apparel, one of Kornit’s largest customers, had decided to acquire digital printing systems from one of Kornit’s competitors. On this news, the price of Kornit shares declined by $18.78 per share, or approximately 33.29%, from $56.41 per share to close at $37.63 on May 11, 2022.
On July 5, 2022, Kornit announced its preliminary financial results for the second quarter of 2022. The Company disclosed that it would report a significant revenue shortfall in the quarter. Specifically, Kornit expected revenue for the second quarter to be reduced by more than 35% at the midpoint of Kornit’s previous revenue guidance, which the Company had provided less than two months earlier, in May 2022. On this news, the price of Kornit shares declined by $8.10 per share, or approximately 25.67%, from $31.56 per share to close at $23.46 on July 6, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies and that those problems and deficiencies caused Kornit to cede market share to competitors. This, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs.