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How Limelight Networks, Inc. Rose 15% in March

By Anders Bylund – Updated Apr 5, 2017 at 11:14PM

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The content-delivery specialist is taking over business opportunities that larger rival Akamai is leaving behind. One company's trash is another's economies of scale.

What happened

Shares of Limelight Networks (EGIO -6.29%) gained 14.7% in March 2017, according to data from S&P Global Market Intelligence.

So what

Seen through a short-term lens, this jump was driven by the launch of a $25 million share-buyback plan. That's an impressive repurchase commitment for a company sporting a $258 million market cap. The next day, the company also reported record traffic levels across its global content-delivery network.

In a full-year perspective, Limelight is absorbing plenty of content-delivery business left behind by larger rival Akamai Technologies (AKAM -2.14%), as that company continues to deepen its focus on security services.

Global networking diagram

Image source: Getty Images.

Now what

The transfer of media-focused content-delivery services from Akamai helped Limelight to a market-crushing 75% return in 2016. The surge has slowed down to 45% over the last 52 weeks in a rollicking series of up-and-down shifts, but that's still an impressive performance. The company's stabilizing revenue growth and solid cash profits should keep those rocket engines running. Limelight has found a unique target market, right where it always wanted to work in the first place.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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