SAN DIEGO, Aug. 20, 2024 (GLOBE NEWSWIRE) — Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Extreme Networks, Inc. (NASDAQ: EXTR) common stock between July 27, 2022 and January 30, 2024. Extreme is a global provider of cloud-based computer networking equipment and related services and support.
For more information, submit a form, email attorney Aaron Dumas, Jr., or give us a call at (800) 350-6003.
The Allegations: Robbins LLP is Investigating Allegations that Extreme Networks, Inc. (EXTR) Misled Investors Regarding its Business Prospects
According to the complaint, during the class period, defendants failed to disclose (a) that Extreme was suffering 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 and because of a lack of alternative sourcing options and thereby had cannibalized their class period purchasing needs; (b) that Extreme was increasingly offsetting these adverse organic demand trends with the fulfillment of backlog orders in a manner that materially exceeded the proportion represented to investors; (c) that, as a result of (a)-(b), Extreme was drawing down its backlog at a much faster rate than represented to investors; (d) that, as a result of (a)-(c), Extreme’s backlog was decreasing at a much quicker pace than a normalized range of $75 million to $100 million “by the end of Q4 fiscal ‘24” as represented to investors; (e) that, as a result of (a)-(d), Extreme was not on track to achieve 2Q24 revenues of $312 million to $327 million, “mid-to-high single digits” revenue growth for FY24, or “mid-teens top line growth” “[o]ver the long term” as represented to investors and such statements lacked a reasonable objective basis in fact; and (f) that, as a result of (a)-(e) above, defendants had materially misrepresented Extreme’s organic demand, revenue growth, and market share gains as the fulfillment of Extreme’s backlog masked a decline in organic demand and attendant revenues.
The complaint alleges that on January 8, 2024, Extreme lowered its 2Q24 and long-term revenue outlooks. On this news, the price of Extreme stock declined. Then, on January 31, 2024, Extreme reported disappointing financial results and operational trends for 2Q24. On this news, the price of Extreme stock dropped 24% over three trading days.
What Now: You may be eligible to participate in the class action against Extreme Networks, Inc. Shareholders who want to serve as lead plaintiff for the class must file their papers with the court by October 15, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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