A lawsuit has been filed against Edgio, Inc. (formerly known as Limelight Networks, Inc.) in the United States District Court for the District of Arizona. The case, Esfandiari v. Edgio, Inc., et al., Case No. 2:23-cv-00691, represents those who purchased or acquired Edgio securities (NASDAQ: EGIO) between February 11, 2021 and March 12, 2023 (the “Class Period”) and alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Investors who wish to serve as lead plaintiff in the case have until June 26, 2023, to file a motion with the court.
Edgio announced on March 13, 2023, that it will restate its financial statements for the years ended December 31, 2021 and 2020, as well as the quarterly reports for fiscal 2022 and 2021, due to an accounting error in the Company’s historic accounting treatment of Edgio’s Open Edge solution. The Company estimated that the restatements would result in a reduction of up to approximately $23.0 million in revenue for the nine-month period ending September 30, 2022, up to approximately $16.7 million for the twelve-month period ended December 31, 2021, and up to approximately $6.6 million for the twelve-month period ended December 31, 2020. This news caused the Company’s share price to fall by 15.5%.
The complaint filed in the class action alleges that throughout the Class Period, Edgio and its defendants made false and/or misleading statements and failed to disclose adverse facts about the Company’s business, operations, and prospects. The complaint further alleges that the sale of Open Edge equipment should have been accounted for as financing leases and that there were material weaknesses in the Company’s internal controls over financial reporting related to Open Edge transactions. Additionally, it claims that the Company’s revenue was overstated in certain periods and that its positive statements about its business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Investors who purchased Edgio securities during the Class Period may contact legal counsel or remain an absent member of the class. They may also move the court to be appointed as lead plaintiff no later than June 26, 2023.