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Limelight Networks Wins Appeal on Akamai Lawsuit

Today Limelight Networks (LLNW) announced that the United States Court of Appeals for the Federal Circuit had affirmed a District Court grant of LLNW's motion for judgement for noninfringement of Akamai's (AKAM) '703 patent. Basically confirmation that at the very least, AKAM can not prove that LLNW infringed on its patent.

Considering the stock action of late its surprising that this news was bullish for LLNW. Eight straight down days sure suggested negative news on the horizon. Highlights the issues with tech trading. Sure it might have gotten an investor out of LLNW much higher then the intraday lows sub $6, but for all the wrong reasons. The market clearly shot first without any logical reason. It clearly wasn't apparent that LLNW would lose this appeal.

In the low $6s, LLNW provides a opportune entry point into Content Delivery Networks (CDNs) and the move to cloud computing. As pointed out a few weeks back by Stone Fox, LLNW still needs to prove they can not only grow but grow profitably. This appeal doesn't neccessarily help on that front, but in weakness in the stock price due to the pending ruling on this case is a buying opportunity.

Technically, the stock is clearly oversold at this point. Tomorrow could hold the key. Stock needs to follow through and quickly climb back over the 50ema at $6.48 in order break the downtrend.

Disclosure: Long LLNW


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