Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Extreme Networks, Inc. (“Extreme Networks” or the “Company”) (NASDAQ: EXTR) common stock between July 27, 2022 and January 30, 2024, inclusive (the “Class Period”). Extreme Networks investors have until October 15, 2024 to file a lead plaintiff motion.

Investors suffering losses on their Extreme Networks investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.

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.

If you purchased Extreme Networks common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847 or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.

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