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EXTR.US
id: 1315
Extreme Networks (EXTR) Backlog Issues Case
N.D. California
Court3:24-cv-05102
Case number27 Jul 2022
Class period Start30 Jan 2024
Class period End14 Oct 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 Status
Lead Plaintiff Submission
Alleged Offence
Mismanagement,
Misleading Statements,
Omissions
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
27 July 2022
Filing date
13 August 2024
Lead Plaintiff Deadline
14 October 2024
Judge
Hon. Trina L. Thompson