Those who've been reading my ramblings here at Fool.com for any amount of time know that I'm an investor in Akamai Technologies
Yesterday, Akamai, which specializes in speeding the delivery of content and software over the Web, announced that it had finally settled a long-standing legal dispute with former rival Digital Island, now bankrupt and known as Cable & Wireless Internet Services. The fight dates back to December 2001, when a patent lawsuit was decided in Akamai's favor, though three provisions of the patent were, at the time, determined invalid. Recently, however, a Federal District Court overturned that ruling and upheld all provisions of the patent.
Still, both victories had been more symbolic than anything else, as damages weren't agreed upon -- that is, until yesterday. Even then, investors were left wondering by the press release, which said squat about how much Akamai expects to receive. Judging from their buying today -- Akamai's stock is trading more than 3% higher as of this writing -- investors appear to think it's a material windfall. (Oops.)
Actually, it's not all that much. In an interview yesterday, Akamai spokespeople revealed that the deal is technically worth $4.5 million, but that with bankruptcy proceedings at Cable & Wireless Internet Services, the company expects to yield no more than $1.2 million in cash payments spread out over time. Even had that sum been paid in full last quarter it would have added only a penny per share in earnings.
The lesson here is simple: Don't assume. As an owner, you have the right -- nay, the obligation -- to ask questions of the management of your company. That's all I did. And now I know a little more about a firm I'm counting on to help meet my long-term financial goals. There's a word for that, folks: Foolish.
For related Foolishness:
- Akamai caught a serious profit wave in the third quarter, dude.
- I wish I had caught on to Akamai's curl when it was still a penny stock.
- There have been days when I wished both PeopleSoft
(NASDAQ:PSFT) and Oracle(NASDAQ:ORCL) had investors acting like owners.
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Fool contributor Tim Beyers owns shares of Akamai and Oracle. You can view his Fool profile and other stock holdings here.
