Extreme Networks, Inc. (EXTR) Class Action

Extreme Networks, Inc. (EXTR) is under fire from investors who allege the company misled them about its financial performance. A class-action lawsuit has been filed, claiming the networking equipment provider painted a rosy picture of robust organic growth, a substantial backlog, and market share gains that would fuel record revenues.

The complaint contends that Extreme Networks’ public statements masked a deteriorating business environment. The company allegedly overstated its organic demand, relying heavily on backlog orders to inflate revenue figures. It is further alleged that the company downplayed the rapid erosion of its backlog while misleading investors about its true growth trajectory.

The cracks in Extreme Networks’ facade began to emerge in January 2023 with the resignation of its CFO and a subsequent earnings report that revealed a decline in backlog and book-to-bill ratios. Despite these warning signs, management assured investors that the backlog would remain stable.

However, subsequent disclosures painted a more dire picture. In August 2023, the company reported a staggering $245 million decline in backlog over the past year.

Then, in November 2023, Extreme Networks acknowledged an “air pocket of demand” as it worked through its backlog.

More recently, in January 2024, Extreme Networks slashed its revenue forecasts, citing channel inventory issues and weaker-than-expected demand.

Each of these events drove the price of Extreme Networks shares sharply lower, wiping out significant shareholder value. Law firm Hagens Berman is investigating whether the company’s actions constitute securities fraud.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the EXTR securities class-action case about?

We are examining whether Extreme Networks misled investors about the health of its business.

WHAT SHOULD I DO?

I worked at EXTR. What should I do?

If you were an employee of EXTR, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in EXTR, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any EXTR investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.