NEW YORK, Aug. 16, 2024 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a lawsuit has been filed against Extreme Networks, Inc. (NASDAQ: EXTR) and certain of the Company’s senior executives.
If you invested in Extreme, you are encouraged to obtain additional information by visiting https://www.bfalaw.com/cases-investigations/extreme-networks-inc.
Investors have until October 15, 2024 to ask the Court to be appointed to lead the case. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Extreme common stock. 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.
What is the Lawsuit About?
The complaint alleges that Extreme overstated the strong demand for its products and that its record backlog would accelerate growth. In truth, it is alleged that demand for Extreme’s products had declined as its clients ordered more product than needed in the wake of the COVID-19 pandemic to avoid supply shortages. As a result, the backlog cannibalized rather than accelerated growth.
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.
Click here if you suffered losses: https://www.bfalaw.com/cases-investigations/extreme-networks-inc.
What Can You Do?
If you invested in Extreme, you have rights and are encouraged to submit your information to speak with an attorney.
All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The Firm will seek court approval for any potential fees and expenses. Submit your information by visiting:
https://www.bfalaw.com/cases-investigations/extreme-networks-inc
Or contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619
Why Bleichmar Fonti & Auld LLP?
Bleichmar Fonti & Auld LLP 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.
For more information about BFA and its attorneys, please visit https://www.bfalaw.com.
https://www.bfalaw.com/cases-investigations/extreme-networks-inc
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