Edgio, Inc., a business services provider, has announced that it will be delisted from the Nasdaq Capital Market due to the initiation of Chapter 11 bankruptcy proceedings and non-compliance with Nasdaq's financial reporting requirements. The company, formerly known as Limelight Networks (NASDAQ:EGIO), Inc., received a formal notice of delisting from Nasdaq on Monday, September 9, 2024.
The delisting is a direct consequence of Edgio's voluntary Chapter 11 bankruptcy filing, which took place on the same day. Nasdaq cited the company's failure to meet the exchange's listing rules, specifically concerning the timely filing of periodic financial reports, as an additional reason for the delisting action.
Edgio's common stock will be suspended from trading on Nasdaq as of Monday, September 18, 2024, and will subsequently be removed from listing and registration on the exchange.
Following the delisting, Edgio's common stock is expected to trade on the Pink Open Market, also known as the "pink sheets," which is a less regulated and more limited trading platform. The company has cautioned that this move will likely result in a less liquid market and could further depress the trading price of its common stock. Edgio has also advised that investors should consider the trading of its securities during the Chapter 11 process as highly speculative and risky.
In addition to the delisting notice, Edgio disclosed that it has entered into incentive bonus agreements with certain executive officers. These agreements are contingent upon the sale of company assets to Lynrock Lake Star LLC or its affiliate and the achievement of specific EBITDA targets for the fiscal year 2025. The bonus pool for the executive leadership team participants ranges from $937,500 to a potential maximum of $1.25 million, based on performance levels.
Edgio's recent developments reflect the challenges it faces amid the bankruptcy process, including potential impacts on liquidity, operations, and stakeholder interests. The company has expressed uncertainty regarding the future trading of its common stock and the ability to maintain relationships with key partners during the restructuring.
The information provided in this article is based on Edgio, Inc.'s recent SEC filing.
InvestingPro Insights
As Edgio, Inc. navigates the complexities of Chapter 11 bankruptcy and faces delisting from the Nasdaq Capital Market, real-time data from InvestingPro provides additional context for investors considering the company's financial health and stock performance. According to InvestingPro, Edgio operates with a significant debt burden and may have trouble making interest payments on its debt. This aligns with the company's current fiscal challenges and restructuring efforts.
InvestingPro data shows Edgio's market capitalization has shrunk to just $12.53 million, reflecting the market's response to the company's financial distress. The stock's price has also taken a substantial hit, with a one-year price total return of a staggering -93.55%, indicating a severe loss of investor confidence. Additionally, the company's Price / Book ratio as of the last twelve months ending Q3 2023 stands at a mere 0.08, suggesting that the market values the company at a fraction of its book value, which is often a sign of significant market undervaluation or underlying issues within the company.
For investors seeking more in-depth analysis and additional InvestingPro Tips, such as the company's cash burn rate and short-term obligations, these can be explored further through the InvestingPro platform, which lists a total of 19 additional tips for Edgio, Inc. at https://www.investing.com/pro/EGIO. These tips could provide valuable insights as stakeholders assess the potential risks and opportunities associated with Edgio's stock during this volatile period.
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