Analyst: Things Can’t Get Worse For Limelight Investors (LLNW)

Content delivery network Limelight Networks’ (LLNW) is looking at two starkly different futures: A long patent mess, or a quick take-out.

In a note today, Jefferies analyst Katherine Egbert walks through both scenarios. The grim one: Akamai (AKAM), which beat Limelight in a patent suit last week, gets a permanent injunction against Limelight. Limelight gets an emergency stay during the appeal — which could take a year or so — and scrambles to keep customers signed on and work around Akamai’s patent. The good news for LLNW investors: Katherine thinks that outcome is already priced into the stock.

Better version: Limelight gets bought, either by Akamai, AT&T (T), Level 3 (LVLT), or someone else. A potential acquisition would probably be around $6-$7 per share, she says. That’s a roughly up to 60% more than today’s prices, but a 70%-75% discount to Limelight’s 52-week high.

So which version does Katherine think will happen? She won’t go out on a limb and make a call. But Limelight CEO Jeff Lunsford could shed more light today during his speech at Morgan Stanley’s tech conference at 5:45 E.T. We’ll cover it live.

See Also:
rumour: Akamai Tried To Buy Limelight During Trial
Akamai Legal Victory Could Also Be Big Business Win
Akamai Wins Limelight Patent Suit, $45.5 Million

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