Limelight’s Crazy Week Begins: Stock Soars 13% Ahead Of Patent Hearing (LLNW, AKAM)


Limelight Networks, the embattled content delivery network, has seen its shares gyrate heavily in the last three weeks. After a two-day, 30% spike at the beginning of the month, shares had gradually dropped down until today, when they got a 13% bump. Why? We don’t know. But we have some ideas.

Limelight (LLNW) has a big date on Wednesday (June 18) in its patent war with rival Akamai Technologies (AKAM); so far, it’s a war Limelight is losing. This week Federal Judge Rya Zobel will hear arguments from both sides, including Akamai’s motion for a permanent injunction, which, if granted without a stay, could potentially jeopardize half of Limelight’s business. Also being heard: Limelight’s request for a new trial, etc. We suppose that Judge Zobel could immediately announce something this week, but we wouldn’t count on it, and we figure that LLNW investors would be thinking the same thing.

So what else has them jittery? A few possible explanations:

– A chat hosted by Citigroup with industry analyst Dan Rayburn, “where he reviewed the CDN landscape, pricing and the potential opportunity for Limelight to have a work-around to Akamai’s patent,” according to a post on the Yahoo Finance message boards.

– Excitement about a new Amazon (AMZN) video streaming service, which, like Amazon’s Unbox movie download service, would presumably run on Limelight’s servers.

– Investors deciding that Limelight is cheap at $3.10 a share. Last month, Jefferies analyst Katherine Egbert estimated that Limelight’s non-patent-infringing business is worth $4 a share.

– More acquisition rumours: Level 3 (LVLT), Akamai, and Microsoft (MSFT) have all been mentioned as potential buyers in the past.

Are we missing something? Any rumours about the hearing on Wednesday? We’re all ears: Reach us in comments below, via email at [email protected], or via our anonymous tip box.

See Also:
Limelight, Akamai’s Next Day In Court: June 18
What’s Limelight’s Non-Patent-Infringing Business Worth?
Limelight Networks Feeling Pricing Pressure, Q1 Misses

Disclosure: Panther Express, one of SAI’s sister companies, competes with Akamai and Limelight.