Lawsuit filed for Investors with substantial losses in shares of Kornit Digital Ltd. (NASDAQ: KRNT)

An investor, who purchased shares of Kornit Digital Ltd. (NASDAQ: KRNT), filed a lawsuit in the U.S. over alleged violations of Federal Securities Laws by Kornit Digital Ltd.

Investors who purchased a significant amount of shares of Kornit Digital Ltd. (NASDAQ: KRNT) between February 17, 2021 and July 5, 2022, have certain options and for certain investors are short and strict deadlines running. Deadline: April 17, 2023. NASDAQ: KRNT investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

Isreal based Kornit Digital Ltd. develops, designs, and markets digital printing solutions for the fashion, apparel, and home decor segments of printed textile industry.

Kornit Digital Ltd. generates revenue from sales of its printing systems as well as textile inks and other consumable products for use in its digital printers Kornit Digital Ltd. also provides customer assistance and equipment services to end-users of its printers through customer support contracts, including technical support, maintenance, and repair. In addition, during the Class Period, Kornit expanded its business and began offering software services to its customers, including a suite of end-to-end fulfillment and production solutions called KornitX, through which the Company provides, among other things, automated production systems and workflow and inventory management.
Kornit Digital Ltd's largest customer is e-commerce company, Amazon.com, Inc. The Company's other large customers een February 17, 2021 and July 5, 2022included apparel and activewear brand, Delta Apparel, Inc. ("Delta Apparel"), as well as Fanatics, Inc. ("Fanatics"), a provider of licensed sports merchandise. Kornit Digital Ltd. generates more than 60% of its revenues from its ten largest customers. Because such a significant portion of Kornit's revenues is concentrated among its largest customers, it was crucial that the Company maintain those major customers and continue to expand its customer base in order to achieve Kornit's ambitious goal of generating $1 billion in revenue by 2026.
On March 28, 2022, Delta Apparel and Fanatics-two of Kornit's major customers-announced that for months they had collaborated with one of Kornit Digital Ltd's principal competitors to develop a new digital printing technology that directly competed with Kornit's products and services.

On May 11, 2022, Kornit Digital Ltd. reported a net loss of $5.2 million for the first quarter of 2022, compared to a profit of $5.1 million in the prior year period. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts' expectations. Kornit Digital Ltd. attributed its disappointing guidance to a slowdown in orders from customers in the e-commerce market. In addition, the Company admitted that, for at least the previous two quarters, Kornit Digital Ltd. knew that Delta Apparel had acquired digital printing systems from a Kornit competitor.

Then, on July 5, 2022, Kornit Digital Ltd. announced that it would report a significant revenue shortfall for the second quarter of 2022. Specifically, Kornit Digital Ltd. expected revenue for the second quarter to be in the range of $56.4 million to $59.4 million, well below the previous revenue guidance of between $85 million and $95 million that the Company provided less than two months earlier. 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."

Shares of Kornit Digital Ltd. (NASDAQ: KRNT) declined from $95.88 per share on Febaury 28, 2022 to $22.00 per share on July 14, 2022.

The plaintiff claims that between February 17, 2021 and July 5, 2022, the Defendants repeatedly touted the competitive advantages provided by Kornit's technology and assured investors that the Company faced virtually no meaningful competition in the "direct-to-garment" printing market, that the Defendants also assured investors that there was strong demand for Kornit's digital printing systems and consumable products, such as textile inks, as well as for the services the Company provides customers to maintain and manage its digital printers, and to manage customer workflow,t hat the Defendants further assured investors that the strong demand for the Company's products and services would enable Kornit Digital Ltd. 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, that the Defendants 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, that those problems and deficiencies caused Kornit Digital Ltd. 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, and that as a result of Defendants' misrepresentations, Kornit ordinary shares traded at artificially inflated prices between February 17, 2021 and July 5, 2022.

Those who purchased shares of Kornit Digital Ltd. (NASDAQ: KRNT) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.