Robbins Arroyo LLP: Extreme Networks, Inc. (EXTR) Misled Shareholders According to a Recently Filed Lawsuit
Robbins Arroyo LLP announces that a lawsuit was filed against Extreme Networks, Inc. (NASDAQCM: EXTR) in the Superior Court of the State of California, Santa Clara County. The complaint is brought on behalf of Extreme Networks for alleged breaches of fiduciary duty by Extreme Networks’ officers and directors from November 4, 2013 to the present. Extreme Networks provides software-driven networking solutions worldwide.
Extreme Networks Accused of Misrepresenting Its Financial State
According to the complaint, on October 31, 2013, Extreme Networks acquired Enterasys Networks, Inc. (“Enterasys”), a privately held provider of wired and wireless network infrastructure and security solutions. Prior to the acquisition, Extreme Networks officials represented that the transaction would be beneficial for the company, stating that Enterasys “will certainly be transformational for our Companies, the industry, and create significant value for the Extreme shareholders.” Extreme Networks officials also stated that its partnership with Lenovo Group Ltd. (“Lenovo”) would be among its large revenue drivers going forward. Throughout the relevant period, Extreme Networks officials submitted several filings with the U.S. Securities and Exchange Commission and released numerous press releases touting positive financial results and emphasizing its progress with integrating Enterasys and developing its partnership with Lenovo.
However, the complaint alleges that these statements were misleading because they failed to disclose that: (1) Extreme Networks’ revenue depended on the successful integration of Enterasys and its salesforce, but the company’s integration of operations was not successful; (2) the failure to integrate the respective salesforces of Extreme Networks and Enterasys materially impacted the company’s prospect of redressing problems with delays and cancellations; and (3) Extreme Networks did not control, let alone have visibility into, Lenovo’s server business plans and/or that Extreme Networks officials knew that Lenovo was unprepared or unwilling to sell Extreme Networks products. On April 20, 2015, the market learned the truth of Extreme Networks’ financial and operational difficulties. On this news, Extreme Networks stock dropped 25% to close at $2.50 per share on April 20, 2015.
Extreme Networks Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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