Limelight Networks: How Many Class Action Suits Can It Get? (LLNW, GS, MS)

August 21, 2007 by Douglas A. McIntyre

One thing has held true since the bubble burst and long before then: When shares of a company get hit hard, attorneys file class action lawsuits against a company for misleading shareholders and causing losses.  There was a suit filed against Limelight Networks, Inc. (NASDAQ:LLNW) today, but after looking on the surface there have been a slew of suits.  It looks like seven suits have been filed so far:

August 21: Lerach Coughlin Stoia Geller Rudman & Robbins LLP
August 20: Klafter & Olsen LLP
August 20: Wolf Haldenstein Adler Freeman & Herz LLP
August 17: Roy Jacobs & Associates
August 15: Federman & Sherwood    
August 15: Law Offices of Brian M. Felgoise, P.C.
August 13: Paskowitz & Associates

Interestingly enough, it seems that law firms never go after the underwriters.  That isn’t the always the case and a huge master settlement has been paid by top firms, but these law firms tend to file against the company itself.  When you see a stock price at $15.00 in June, gap over $20.00 on the IPO, come off and then go higher, just to fall off a cliff.  Shares are currently under $8.00 and the trading range since its IPO is $7.96 to $24.33.

Needless to say, the firms filing suits now may need to look elsewhere.  Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) were the lead underwriters in this last offering.

Jon C. Ogg
August 21, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.