What happened
Shares of Limelight Networks (EGIO -5.28%) gained 14.2% in January 2021, according to data from S&P Global Market Intelligence. The content-delivery network (CDN) specialist posted a single-day jump of 8.5% when a well-respected executive was tapped to take the wheel as Limelight's CEO. The stock was also briefly caught up in WallStreetBets speculation near the end of the month.
So what
Longtime CEO Bob Lento retired on Feb. 1. Limelight's new CEO is Bob Lyons, formerly CEO of privately held data security company Alert Logic. Lyons is known as a growth-oriented leader with a history of repositioning and scaling up small companies. With trailing sales of $235 million and a market capitalization of just $521 million, Limelight arguably fits that bill.
On Jan. 27, the Reddit forum r/WallStreetBets (WSB) and social media accounts associated with this group started to pour money into a handpicked list of stocks with fairly high short-selling interest, aiming to drive these stocks "to the moon" and collect large profits along the way. Limelight's stock had a 13% short-sale ratio at the time. The ticker was mentioned a couple of times in the WSB effort, and share prices skyrocketed briefly. Limelight's stock jumped from $4.65 to $5.61 in the space of two days then fell back to $4.56 per share when the WSB crowd lost interest in this ticker and moved on.
Image source: Getty Images.
Now what
The WSB incident makes for an interesting blip on the stock chart, but it didn't make any difference to Limelight's business operations, its long-term market value, or its growth prospects. The selection of a proven expert in business growth has the potential to bring in real improvement in all of these areas. We'll hear more about Mr. Lyons and his updated business plan when the company reports earnings next Thursday. Serious investors are ignoring the WSB speculation to focus on the smart planning and execution that really drives successful investments in the long run.
