Soros Fund Hikes Ownership Stake in Extreme Networks

In a 13G filed with the SEC, George Soros' hedge fund Soros Fund Management has disclosed a 5.72% ownership stake in Extreme Networks (EXTR). The filing was made due to activity on June 16th, 2009 and they now own 5,079,766 shares. They have significantly increased their position since when we looked at Soros' entire portfolio. In their last 13F filing which details positions as of March 31st, 2009, Soros Fund Management owned 766,666 shares of EXTR. Since then, they have added an additional 4,313,100 shares and have obviously significantly boosted their stake.

Soros is good to track because of his excellent macro sense and formidable track record as an investor. His thoughts on the current financial landscape are detailed in his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. If you want to get a better sense as to how Soros formulates his investment theses, we highly recommend reading his first book, The Alchemy of Finance. This book is a staple in our recommended reading list and after you read it, you'll understand why

Soros is famous for his stellar returns with partner Jim Rogers when they ran their Quantum fund. (We just covered Jim Rogers' portfolio recently too). Nowadays, he employs his investment style at his own firm. Whether it be equities, bonds, currencies, debt, or commodities, Soros is more of a global macro player, seeking investments in whatever market they can gain an edge.

2008 was an interesting time to be investing, to say the least. Soros detailed his thoughts about his portfolio from 2008 and it makes for a good read. His fund finished 2008 up 8%. His success in 2008 came from making correct bets on the US dollar and betting that short term interest rates in the UK would decline. Interestingly enough, Soros was down for much of the year, until he fought his way back with overtrading. We just recently looked at his portfolio and noted that Soros likes bonds at this stage. For some of Soros' other activity, check out the SEC filings that we've covered including: his new position in Plains Exploration (PXP) and his 13G filing on Mercury Computer (MRCY).

Taken from Google Finance, Extreme Networks is "a provider of network infrastructure equipment for corporate, government, education and healthcare enterprises and metropolitan telecommunications service providers. The Company designs and sells secure network infrastructure equipment and offer related services to enterprises and service providers worldwide."

Comments

[Spook:]

Why? I mean why did Soros invest in Extreme? what did he saw that we didn't?

Jun 30 08:40 AM

[Gregman2:]

Extreme must have some big contracts on the horizon. Their Sentriant Security Appliances are not that impressive (compared to some others, like Blue Coat). Also, they don't have a great disaste-proof solution yet. See www.iosafe.com/1

Jun 30 05:39 PM

[Nom De Plum:]

It's pretty obvious their investment is EXTR is for the balance sheet and the lack of cash burn to maintian its balance sheet. Networking is a consolidating space right now as long-term growth expectations are coming down due to the maturity of the industry. The risk/reward is very favorable at these levels as soon as EXTR management wakes up and realizes that they don't have scale to compete anymore and the best option for shareholders is auction off the company to the highest bidder.

Jul 01 10:06 AM