Limelight Networks, Inc. (NASDAQ:LLNW) had a rough ride in 2011. Shareholders took a particularly hard hit in August when LLNW lost half of its value in a matter of days. While the stock price has recovered some lost positions since then things are not quite rosy for LLNW.
Yesterday LLNW closed up 2.38% at $3.01. However, the previous two highs failed to reach the peaks from mid-November and early December, and the price seems to be consolidating at a lower level. Additionally the trading volumes seem to have subsided substantially in the last few months. On the other hand, it’s not a bad thing to have a solid base for a potential breakout.
The crash from August came after Limelight fell short of its guidance, and the company is still not making a profit. However, probably the largest competitor of LLNW, Akamai (NASDAQ:AKAM), spent $268 million in the acquisition of Contendo, and this may help LLNW’s position.
Limelight may be a lot smaller than Akamai, it still has its chances to do better in this highly competitive and lucrative sector. The company may need to deliver a more solid business performance, if it is to boost its shareholders’ confidence.