Limelight Networks (LLNW), an aggressive player in the CDN market is feeling the blow back of the CDN price wars. The stock is tanking today, mostly because Wall Street didn’t like their second quarter numbers. Paul Kedrosky thinks that with annual revenues of over $100 million, Limelight could become takeover bait.
Limelight went public in June 2007 and raised $240 million by selling 16 million shares. The stock climbed to shade over $23 a share in early July. Over past 30 days, the stock has declined almost 40% and is now trading at around $14 a share.
Related Stories: Our previous Limelight Networks coverage.
Disclaimer: Limelight has been an advertiser on GigaOM Network.
5 comments so far
4:49 PM PT
Initially I thought CDN stood for canadian…But no, content delivery network (thanks Wikipedia).
11:31 PM PT
Limelights previous claim to fame was being a cdn for YouTube and soon as that commit was up and Google took over YouTube distribution, where did Limelight fit? No where, most likely as anyone can roll out a Squid reverse proxy at a few Equinix dc’s and hook up a 10gb port to the public peering hub. Now they’re augmenting their cdn service by selling transit and ask anyone - it’s a tough game selling transit out there when you have no clear value prop over Level 3, Qwest or even Cogent. They don’t have the peering and bgp routes of Level 3, Above.net, AT&T/NSA (they are as one), etc. and they don’t have all the pops like Akamai does (who is also hurting), so it’s hard to see where Limelight fits in. They’re trying hard to expand to other countries which freaks out the Asian-area incumbents like CDNetworks, but it’s not going to be a fast enough expansion to stave off the inevitable downward spiral. I foresee a new LL CEO in 2 quarters. Someone has to pay for the stock dropping and poor quarterly results, after all besides the salespeople not making their sales quotas, naturally.
3:42 AM PT
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11:15 AM PT
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