The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Extreme Networks, Inc. (EXTR)

Published 2 months ago via Business Wire

The Law Offices of Frank R. Cruz reminds investors of the upcoming October 15, 2024 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who acquired Extreme Networks, Inc. (“Extreme Networks” or the “Company”) (NASDAQ: EXTR) common stock between July 27, 2022 and January 30, 2024, inclusive (the “Class Period”).

If you are a shareholder who suffered a loss, click here to participate.

On November 1, 2023, Extreme Networks released its first quarter fiscal year 2024 financial results and advised that “channel partners are digesting a large volume of backlog release and focusing on network deployment, slowing down their current ordering.” On this news, Extreme Networks’ stock price fell $2.76, or 13.4%, to close at $17.86 per share on November 1, 2023, thereby injuring investors.

Then, on January 8, 2024, Extreme Networks disclosed that its second quarter fiscal year 2024 financial results would be lower than previously expected due to “industry headwinds of channel digestion and elongated sales cycles.” On this news, Extreme Networks’ stock price fell $1.29, or 7.4%, to close at $16.23 per share on January 9, 2024.

Then, on January 31, 2024, Extreme Networks released its second quarter fiscal year 2024 financial results, revealing a year-over-year decline in revenue. On this news, Extreme Networks’ stock price fell $3.13, or 18.8%, to close at $13.51 per share on January 31, 2024, 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: (1) that the Company was suffering from adverse client demand trends as its clients had ordered more product from the Company 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; (2) that the Company 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; (3) that, as a result, the Company was drawing down its backlog at a much faster rate than represented to investors; (4) that, as a result, the Company’s backlog was already decreasing and at a much quicker pace than defendants’ statements to investors that backlog would only “begin to shrink” in 4Q23 and it would be not until “fiscal ‘26 when it really goes back to normal”; (5) that, as a result, the Company’s backlog was not on track to continue increasing to $600 million; and (6) that, as a result, defendants had materially misrepresented the Company’s organic demand, revenue growth, and market share gains as the fulfillment of the Company’s backlog masked a decline in organic demand and attendant revenues; and (7) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.

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If you purchased or otherwise acquired Extreme Networks common stock during the Class Period, you may move the Court no later than October 15, 2024 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Century City, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

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