Robbins Arroyo LLP: Extreme Networks, Inc. (EXTR) Misled Shareholders According to a Recently Filed Lawsuit
July 08 2016 - 4:09PM
Business Wire
Shareholder rights law firm 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.
View this information on the law firm's Shareholder Rights Blog:
www.robbinsarroyo.com/shareholders-rights-blog/extreme-networks-inc-july-2016
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, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: http://www.businesswire.com/news/home/20160708005841/en/
Robbins Arroyo LLPDarnell R. Donahue(619) 525-3990 or Toll Free
(800) 350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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