Limelight Losing Its Shine

• Report this Comment On August 30, 2011, at 5:29 PM, Yahalom wrote:

  Stock up 5.65% today, and 3.05% in after-hours trading. Please explain how this is a decline. Thank you.

• Report this Comment On September 02, 2011, at 7:24 AM, Rikaelus wrote:

  I think this article was dated before it was even posted. As mentioned, the EyeWonder division performed below expectations, but Limelight also just sold that division for $66 million in cash. Granted that's significantly less than what they paid for it less than two years ago, but it does show a desire to trim the fat, and $66 million cash is good for re-investment into development and infrastructure in the here and now.

  Limelight has also acquired other companies in recent months that they're likely still integrating into their family of products. I doubt those new products are being effectively cross-sold to existing customers just yet, so some of the benefit of those acquisitions isn't yet being seen.

  With regards to Limelight's under performance in Q3, it's really not as bad as it seems. It doesn't demonstrate mismanagement or a negative trend so much as bad luck: revenue was lost when one of their large customers suffered network downtime, affecting other customers as well.

  Granted, that may demonstrate a notable reliance on individual customers to meet revenue expectations, but I'm sure the same applies to Akamai and others in the industry that sport notably large customers.

  From where I sit, the recent decline from ~$4 to ~$2 was based primarily on knee-jerk, irrational panic over the mild revenue shortcoming in Q3 that resided on the back of the market suffering from uncertainty regarding the debt ceiling talks in Congress. The paint might be scratched, but there's still an engine for growth under the hood.

  And for my part I'm taking a leap of faith and recently purchased shares in Limelight while it's sitting in this ~$2 range. It's a good investment opportunity. As competitive as the CDN industry may be, Limelight is still a growth-oriented company, both in its core CDN services and the value-add products it has picked up from acquisitions.

• Report this Comment On September 02, 2011, at 7:36 AM, Rikaelus wrote:

  Apologies. I incorrectly stated Q3 above, when I meant Q2.

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