Kornit Digital Ltd.

On May 11, 2022, Kornit released its first quarter 2022 financial results, reporting a net loss of $5.2 million and lowering second quarter revenue expectations by $13 million. The Company blamed a slowdown in orders in the e-commerce segment while also revealing that one of its largest customers had decided to acquire digital printing systems from one of Kornit’s competitors.

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

Then, on July 5, 2022, after the market closed, Kornit released its preliminary financial results for the second quarter of 2022, disclosing a significant revenue shortfall during the quarter. Instead of previous guidance expectations of $85 million to $95 million, the Company estimated a range of $56.4 million to $59.4 million.

On this news, Kornit’s stock price fell $8.10, or 25.7%, to close at $23.46 per share on July 6, 2022, thereby injuring investors further.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (i) the Company’s digital printing business was beset by significant quality control problems and deficient customer service; (ii) as a result, Kornit was more vulnerable to pressure from competitors than it had represented and lacked the competitive advantages it touted to investors; and (iii) as a result of the foregoing, Kornit lost market share to competitors, which led to a decline in the Company’s revenues, as Kornit’s dissatisfied customers sought out alternative options for their digital printing needs.