Level 3 Outlines Network Expansion On Netflix Pact (LVLT, NFLX, LLNW, AKAM)
Level 3 Communications, Inc. (NASDAQ: LVLT) is confirming what we already knew… Netflix Inc. (NASDAQ: NFLX) selected the wholesale data carrier to serve as a primary content delivery network provider for streaming functionality and to support storage for the entire…
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Level 3 noted that it will double its storage capacity and add 2.9 Terabits per second of capacity. The 2.9T is in addition to the 1.65 Tbps that was just deployed in the third quarter.
Netflix is expected to pass 19 million subscribers in North America by the end of this year alone, and the real growth ahead may come from international expansion in the years ahead.
As part of the deal, Level 3 will store the entire Netflix streaming library of more than 20,000 titles beginning January 1, 2011.
Limelight Networks, Inc. (NASDAQ: LLNW) is deemed the other winner in this pact, although Akamai Technologies, Inc. (NASDAQ: AKAM) is deemed the loser even though Netflix may still have some business with them.
Level 3 has been on a roll this week in anticipation of this deal. Shares closed on Monday at $0.89 but rose to $1.05 on more than 100 million shares on Tuesday. A small pullback on Wednesday took it to $1.03, but so far we are seeing shares up 7.7% at $1.11 in early Thursday trading indications.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
