Ajay Kapur, the former Chief Technology Officer (CTO) of Edgio, Inc. (NASDAQ:EGIO), has recently divested a significant portion of his holdings in the company. According to the latest filings, Kapur sold a total of 148,026 shares of Edgio's common stock, with transactions amounting to over $250,000.
The sales took place over two consecutive days. On September 11, 2024, Kapur sold 5,000 shares at a price of $1.10 each. The following day, he disposed of 143,026 shares. The weighted-average sale price for the larger transaction was $1.72 per share, with the shares being sold in multiple transactions at prices ranging from $1.20 to $2.27.
Following these transactions, Kapur's direct ownership in the company has been reduced to zero, signaling a complete exit from his stock position. The sales were executed in accordance with a Limited Power of Attorney for Section 16 reporting obligations, which had been dated September 14, 2021.
Edgio, Inc., formerly known as Limelight Networks (NASDAQ:EGIO), Inc., is a company incorporated in Delaware and is classified under the Services-Business Services, NEC industry. The company's business address is located in Phoenix, Arizona.
Investors and followers of Edgio, Inc. can access further details about the transactions upon request, as Kapur has agreed to provide information regarding the number of shares sold at each separate price to the issuer, any security holder of the issuer, or any staff member of the Securities and Exchange Commission.
In other recent news, Edgio Inc. has announced that it will be delisted from the Nasdaq Capital Market due to its voluntary Chapter 11 bankruptcy filing and non-compliance with Nasdaq's financial reporting requirements. The company's common stock is expected to trade on the Pink Open Market following the delisting. Edgio has also entered into incentive bonus agreements with certain executive officers, contingent upon the sale of company assets to Lynrock Lake Star LLC or its affiliate and the achievement of specific EBITDA targets for fiscal year 2025.
In addition to the bankruptcy proceedings, Edgio is planning an asset sale under court supervision to Lynrock Lake Master Fund LP, which has also entered into a "stalking horse" asset purchase agreement to acquire certain Edgio assets for a credit bid of $110 million. The company has arranged for debtor-in-possession financing of approximately $15.6 million from Lynrock, subject to court approval.
Edgio has secured a senior term loan credit facility, termed the "Priority Credit Agreement," with Lynrock Lake Master Fund LP, providing the company with $9,146,000 in term loans. This results in net cash proceeds of $7,500,000 after an 18% upfront fee. The loan, bearing an interest rate of 19.5% per annum, is set to mature on February 23, 2025.
Furthermore, Edgio has expanded its board of directors from four to five members, with the appointment of Eugene I. Davis. Davis, a seasoned professional with over four decades of experience, will serve as a Class II director and Chairman of the Transaction Committee at Edgio. His term is set for a minimum of six months with a fixed compensation of $40,000 per month. These developments come as part of the company's recent strategic financial management efforts.
InvestingPro Insights
Amidst the news of Ajay Kapur's divestment from Edgio, Inc., a glance at the company's current financial health and stock performance through InvestingPro offers a broader context for investors. With a market capitalization of just $9.13 million, Edgio is navigating through challenging financial waters. The company's price-to-earnings (P/E) ratio, an indicator of market expectations of earnings growth, stands at a negative -0.06, reflecting investor skepticism about its profitability in the near term.
One of the InvestingPro Tips for Edgio highlights that the company is trading at a low Price/Book multiple of 0.06. This could indicate that the stock is undervalued relative to its assets, which might attract investors looking for bargain opportunities. Additionally, Edgio's stock has experienced significant price volatility, which has been a consistent trait according to another InvestingPro Tip. This could be an important consideration for investors with a lower risk tolerance.
InvestingPro Data also reveals that Edgio has seen a substantial revenue growth of 46.16% over the last twelve months as of Q3 2023. However, its quarterly revenue growth has declined by 12.45% in Q3 2023, suggesting some recent struggles in maintaining its sales momentum.
For those interested in further insights, InvestingPro offers additional tips that delve into Edgio's financials and stock performance. Currently, there are 19 additional tips available on InvestingPro that could help investors make more informed decisions about their investment in Edgio.
Investors considering Edgio, Inc. can explore these metrics and more on the InvestingPro platform by visiting https://www.investing.com/pro/EGIO for a comprehensive analysis and real-time data.
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