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Limelight’s Still Shining

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Limelight may soon be out of the frying pan and into the fire. Katherine Egbert, an analyst with the investment bank Jefferies, issued a report today saying she thought a federal judge would decide quickly and in favor of Limelight with regards to a patent infringement suit filed against the content delivery network by rival Akamai.

But Egbert thinks that even if Limelight wins, a buyer will swoop in to snap it up. Unfortunately she thinks many on her list of buyers, which includes AT&T, Level 3 and Akamai, are likely to move Limelight’s customers over to their networks and shut Limelight’s down.

Four months ago a jury in the U.S. District Court of Massachusetts awarded Akamai $45.5 million after it found Limelight guilty of infringement. Yesterday evening a federal court judge gave Limelight Networks a little breathing room in the patent fight by holding off on a permanent injunction that could shut down half of Limelight’s business. The judge is waiting to decide on the rest of several motions before her in the case, and said a favorable decision for Akamai in the other motions might lead to a permanent injunction.

Typically the process of hearing and deciding motions can take a few days to a couple of months, so shareholders are probably hoping Egbert’s conclusions are correct, especially the ones that see Limelight selling for $6 to $7 per share. That’s a far cry from the stock’s $23.82 high last summer, but it’s about where it was trading right before it was socked with the $45.5 million judgment.