SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Kornit Digital Ltd. - KRNT

NEW YORK, April 10, 2023

The investigation concerns whether Kornit and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action] 

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's principal competitors to develop a new digital printing technology that directly competed with products and services Kornit offered. Delta Apparel revealed that it had already installed this new technology in four of its existing digital print facilities and had plans to expand further. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected 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. 

Then, on May 11, 2022, despite reporting revenues that exceeded expectations, Kornit 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 attributed its disappointing guidance to a slowdown in orders from the Company's customers in the e-commerce segment. In addition, the Company admitted that, for at least the previous two quarters, Kornit knew that one of its largest customers, Delta Apparel, had acquired digital printing systems from a Kornit competitor.

On this news, Kornit's stock price fell $18.78 per share, or 33.3%, to close at $37.63 per share on May 11, 2022.