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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Well, that didn't last long. Not even a week after shares of Limelight Networks (Nasdaq: LLNW ) soared more than 35% on news that Netflix (Nasdaq: NFLX ) could award it and Level 3 Communications (Nasdaq: LVLT ) a chunk of its online video delivery business, the stock fell as much as 12% in intraday trading.
So what: An analyst at Oppenheimer downgraded both Limelight and peer Akamai Technologies (Nasdaq: AKAM ) , reasoning that Level 3's big win changes the dynamics of the Web content delivery (CDN) market.
Now what: This is an ill-informed take based on old news. While it's certainly true that Limelight and Akamai are seeking to profit from the increased amount of video delivered over the Web -- and Netflix is the heavy -- the CDN market has been multi-vendor for a very long time.
Investors who treat the Level 3 win and Oppenheimer's downgrade as anything other than business as usual are either too panicked to be investing in this sector of the market or too unfamiliar with the competitive dynamics of the CDN business to make money.
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