According to the law firm press release, Extreme Networks develops and sells network infrastructure equipment and offers related services contracts for extended warranty and maintenance.
The complaint alleges that during the Class Period, defendants issued false and/or misleading statements and/or omitted adverse information concerning Extreme Networks’ current financial condition and outlook for fiscal 2015, including, among other things, that the Company’s revenue growth depended on the successful integration of Enterasys Networks, Inc., which Extreme Networks had acquired in 2013 but had not successfully integrated, which materially impaired the Company’s ability to address persisting sales problems. In addition, Extreme Networks had begun an alliance with Lenovo, but during the Class Period defendants did not have sufficient visibility into Lenovo’s server business plans to support the Company’s quarterly and fiscal 2015 financial forecasts. As a result of these misrepresentations and/or omissions, Extreme Networks’ stock traded at artificially inflated prices during the Class Period, reaching a high of $8.14 per share in intraday trading on January 23, 2014.
Then on April 9, 2015, after the markets closed, Extreme Networks preannounced that it would miss guidance for the third quarter of 2015, reporting revenue of $118-$120 million and earnings per share of ($0.09)-($0.07), significantly below prior guidance of $130-$140 million and ($0.03)-$0.02, respectively. The Company also announced that trading in its shares had been halted and that the Company’s Chief Revenue Officer, who had been hired only six months earlier to manage the integration of the Extreme Networks and Enterasys salesforces, was “no longer with the Company.” On these disclosures, the Company’s stock price fell almost 25%, from $3.24 per share to $2.50 per share.
Plaintiffs filed a consolidated Complaint on September 26, 2016.
On April 27, 2017, the Court granted Defendants' Motion to Dismiss with leave to amend. An amended Complaint was filed on June 2. Defendants filed a Motion to Dismiss the amended Complaint on July 10. On March 21, 2018, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss the amended Complaint. On September 4, the parties reached an agreement in principle to settle this action. On November 30, the parties entered into a Stipulation and Agreement of Settlement. The Court issued an Order preliminarily approving the Settlement on March 13, 2019. On June 20, the Court issued an Order approving the Plan of Allocation. On July 22, the Court granted final approval of the Settlement and entered Final Judgment.