Extreme Networks (EXTR) Faces Investor Backlash Over Alleged Misleading Statements - Hagens Berman

Core Viewpoint - Extreme Networks, Inc. is facing a class-action lawsuit from investors alleging that the company misrepresented its financial performance, particularly regarding organic growth and backlog figures [1][4]. Group 1: Allegations and Lawsuit Details - Investors claim that Extreme Networks overstated its organic demand and relied on backlog orders to inflate revenue figures, masking a deteriorating business environment [2]. - The lawsuit highlights that the company downplayed the rapid erosion of its backlog while misleading investors about its true growth trajectory [2]. - The class period for the lawsuit is from July 27, 2022, to January 30, 2024, with a lead plaintiff deadline set for October 15, 2024 [1]. Group 2: Business Performance and Management Actions - Signs of trouble began in January 2023 with the resignation of the CFO and a subsequent earnings report indicating a decline in backlog and book-to-bill ratios [3]. - Despite these warning signs, management assured investors that the backlog would remain stable, but by August 2023, the company reported a $245 million decline in backlog over the past year [3]. - In November 2023, Extreme Networks acknowledged an "air pocket of demand" while working through its backlog, and in January 2024, it slashed revenue forecasts due to channel inventory issues and weaker-than-expected demand [4]. Group 3: Investigation and Whistleblower Information - Hagens Berman is investigating whether Extreme Networks' actions constitute securities fraud, with a focus on whether the company misled investors about its business health [5]. - Whistleblowers with non-public information regarding Extreme Networks are encouraged to assist in the investigation, with potential rewards of up to 30% of any successful recovery made by the SEC [5].