Investigations
Extreme Networks, Inc.
Overview
Overview
- Deadline:
- Oct 15, 2024
| Company Name: | Company Name: Extreme Networks, Inc. |
| Stock Symbol: | Stock Symbol: EXTR |
Extreme Networks, Inc. (NASDAQ: EXTR): Extreme Networks, Inc. (“Extreme” or the “Company”) has been sued for violations of the federal securities laws. The complaint asserts claims against the Company and certain of its senior executives under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Extreme common stock between July 27, 2022 and January 30, 2024, inclusive. The case is pending in the U.S. District Court for the Northern District of California and is captioned Steamfitters Local 449 Pension & Retirement Security Funds v. Extreme Networks, Inc., No. 24-cv-05102.
If you incurred losses on your investments in Extreme, you are encouraged to submit your information.
Why was Extreme Sued for Securities Fraud?
Extreme provides cloud-based computer networking solutions and related services and support. The complaint alleges that during the relevant period, Extreme touted the strong demand for its products and stated that its record backlog would accelerate growth.
As alleged, these statements were materially false and misleading. In truth, Extreme suffered from adverse client demand trends as its clients had ordered more product from Extreme than needed in the wake of the COVID-19 pandemic to avoid supply shortages. As a result, the backlog would cannibalize rather than accelerate growth.
The Stock Declines as the Truth is Revealed
On January 25, 2023, Extreme announced the resignation of the Company’s CFO as well as a significant decrease in the Company’s backlog. This news caused the price of Extreme stock to decline by $2.81 per share, or nearly 15%, to close at $16.50 per share on January 25, 2023.
On November 1, 2023, Extreme reported its financial results for 1Q24. In connection with the results, Extreme revealed that drawing down its backlog resulted in an “air pocket of demand” among end customers that resulted in a “more tempered” revenue growth outlook of “mid-to-high single digits” for FY24, and that Extreme was now expecting a normalized backlog of between $75 million to $100 million “by the end of Q4 fiscal ‘24.” This news caused the price of Extreme stock to decline by $2.76 per share, or over 13%, to close at $17.86 per share on November 1, 2023.
Then, on January 31, 2024, Extreme reported disappointing financial results and operational trends for 2Q24. Extreme further revealed that its product backlog had already normalized during the quarter and that the Company made the “conscious decision to put channel digestion behind [it] in the March quarter.” This news caused the price of Extreme stock to decline by $4.05 per share, or over 24%, to close at $12.59 per share on February 2, 2024.
What are my Rights?
If you purchased or otherwise acquired Extreme securities between July 27, 2022 and January 30, 2024, inclusive, you may ask the Court no later than October 15, 2024, which is the first business day after 60 days from the date of the publication of notice of pendency of the action, to appoint you as Lead Plaintiff through counsel of your choice. To be a member of the Class, you need not take any action at this time. The ability to share in any potential future recovery is not dependent on serving as Lead Plaintiff.
If you incurred losses on your investments in Extreme, you are encouraged to submit your information.
You can also contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619
All representation is on a contingency fee basis. Shareholders are not responsible for any court costs or expenses of litigation. The Firm will seek court approval for any potential fees and expenses.
Why Bleichmar Fonti & Auld LLP?
BFA is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.
Attorney advertising. Past results do not guarantee future outcomes.
If you incurred losses on your investments in Extreme, you are encouraged to submit your information.
Why was Extreme Sued for Securities Fraud?
Extreme provides cloud-based computer networking solutions and related services and support. The complaint alleges that during the relevant period, Extreme touted the strong demand for its products and stated that its record backlog would accelerate growth.
As alleged, these statements were materially false and misleading. In truth, Extreme suffered from adverse client demand trends as its clients had ordered more product from Extreme than needed in the wake of the COVID-19 pandemic to avoid supply shortages. As a result, the backlog would cannibalize rather than accelerate growth.
The Stock Declines as the Truth is Revealed
On January 25, 2023, Extreme announced the resignation of the Company’s CFO as well as a significant decrease in the Company’s backlog. This news caused the price of Extreme stock to decline by $2.81 per share, or nearly 15%, to close at $16.50 per share on January 25, 2023.
On November 1, 2023, Extreme reported its financial results for 1Q24. In connection with the results, Extreme revealed that drawing down its backlog resulted in an “air pocket of demand” among end customers that resulted in a “more tempered” revenue growth outlook of “mid-to-high single digits” for FY24, and that Extreme was now expecting a normalized backlog of between $75 million to $100 million “by the end of Q4 fiscal ‘24.” This news caused the price of Extreme stock to decline by $2.76 per share, or over 13%, to close at $17.86 per share on November 1, 2023.
Then, on January 31, 2024, Extreme reported disappointing financial results and operational trends for 2Q24. Extreme further revealed that its product backlog had already normalized during the quarter and that the Company made the “conscious decision to put channel digestion behind [it] in the March quarter.” This news caused the price of Extreme stock to decline by $4.05 per share, or over 24%, to close at $12.59 per share on February 2, 2024.
What are my Rights?
If you purchased or otherwise acquired Extreme securities between July 27, 2022 and January 30, 2024, inclusive, you may ask the Court no later than October 15, 2024, which is the first business day after 60 days from the date of the publication of notice of pendency of the action, to appoint you as Lead Plaintiff through counsel of your choice. To be a member of the Class, you need not take any action at this time. The ability to share in any potential future recovery is not dependent on serving as Lead Plaintiff.
If you incurred losses on your investments in Extreme, you are encouraged to submit your information.
You can also contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619
All representation is on a contingency fee basis. Shareholders are not responsible for any court costs or expenses of litigation. The Firm will seek court approval for any potential fees and expenses.
Why Bleichmar Fonti & Auld LLP?
BFA is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.
Attorney advertising. Past results do not guarantee future outcomes.