Extreme Networks (EXTR) Backlog Issues Case

The defendant has requested the court to dismiss the case.

N.D. California

Court

3:24-cv-05102

Case number

07/27/2022

Class period Start

01/30/2024

Class period End

10/14/2024

Lead Plaintiff motion deadline

$EXTR stockholders filed a claim against Extreme Networks for hiding that its backlog fell faster than expected due to pandemic over-ordering.
After the financial results on January 31, 2024, $EXTR dropped by over 60% from its peak.
Extreme Networks investors can join this case to be notified about potential recovery.
Case Details: 

In July 2022, Extreme reported steady revenue and a record backlog, predicting strong growth for FY23. 

However, by January 25, 2023, the company announced CFO Thomas's departure and a drop in backlog to $542M, with updated clearance timelines.

By August 24, 2023, Extreme’s backlog had fallen to $267.3 million. 

After this news, $EXTR fell by 9% the next day. 

Then, on November 1, 2023, Extreme announced that slower backlog clearance would reduce revenue growth, predicting backlog levels of $75M to $100M by FY24's end. 

On this news, $EXTR dropped by 13%.

Then, on January 31, 2024, Extreme reported weak 2Q24 results, with a 7% drop in revenue and a 37% drop in product revenue. 

They noted that their backlog had normalized and planned to cut channel inventory, which would impact demand.

As a result, $EXTR dropped more than 60% from its peak.

Based on these events, $EXTR investors filed a claim against Extreme Networks, accusing the company of the following:
Extreme’s backlog dropped faster than expected because clients over-ordered during the pandemic. 
The company misled investors about backlog growth and revenue, hiding a decline in actual demand and earnings.
Considering all the representations, investors suspect Extreme Networks hid that its backlog dropped faster than expected due to pandemic over-ordering, masking a decline in real demand.

Case Type

US Securities Class Action

Case Status

Motion to dismiss

Alleged Offence

Mismanagement,

Misleading Statements,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Shock Event Date

07/27/2022

Filing date

08/13/2024

Lead Plaintiff Deadline

10/14/2024

Judge

Hon. Trina L. Thompson

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