Extreme Networks’ short-term growing pains are no cause for worry

“It was the best of times, it was the worst of time” is the opening to the famous Charles Dickens book, A Tale of Two Cities. It’s also described Extreme’s financial performance over the past year.

Earlier this year the company stock was trading a hair over $15 per share. Today, after it came up light on its fiscal third-quarter financial results, the stock plunged over 25 percent in after-hours trading and now stands at $8.40, a little over half of its 52-week high. This could change when the market opens, depending on investor sentiment.

Extreme is now the largest enterprise network pure play

In actuality, saying it’s the worst of times is a bit overly dramatic, as a few years ago, most industry experts thought Extreme Networks was dying a slow death. In 2015, Ed Meyercord took over as CEO and he and the company’s chief marketing, development and product operations officer, Norman Rice, embarked on a plan to acquire underappreciated assets from companies where networking wasn’t the primary business. Rolling up these assets would help Extreme get its mojo back.

Extreme Networks

Norman J. Rice, chief marketing, development and product operations officer, Extreme Networks

In a very short period of time, they acquired the Wi-Fi business from Zebra, a supply-chain technology company; the switching business from Avaya, a unified communications company; and the data center networking business from Brocade, a storage company. Very quickly Extreme went from being a company that people dismissed to the #3 enterprise networking provider and the largest networking pure play. No servers, IP phones, storage or anything else — just networking.

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