Extreme Networks Investor Says Leaders Misrepresented Demand

Extreme Networks Inc. executives and directors pointed to the computer network company’s equipment backlog as evidence of strong customer demand, even though the backlog was actually a byproduct of Covid-19 supply chain problems, an investor alleges.

“In reality, Extreme’s distributor channel was stuffed with outdated and unwanted inventory, so the Company’s financial results and backlog did not reflect true demand,” Nathan Turner says on behalf of the company. Turner filed his derivative suit Thursday in the US District Court for the Northern District of California.

Subsequent revelations about falling backlog—and the company’s announcement that it would discontinue reporting quarterly backlog ...