Edgio Files for Chapter 11 Bankruptcy, Stock Declines Sharply
Edgio Inc, a provider of media content and cybersecurity solutions, has filed for Chapter 11 bankruptcy protection in Delaware. The Nasdaq-listed company made the filing on Monday, listing $379 million in assets and $369 million in liabilities. Following the announcement, Edgio’s stock experienced a severe decline, reflecting investor concerns about the company’s future.
The bankruptcy process comes with the support of Edgio’s primary lender, Lynrock Lake Master Fund LP, according to the company’s statement. Edgio has also entered into a stalking horse asset purchase agreement with Lynrock, which intends to buy $110 million worth of secured debt as part of the restructuring process.
Stalking Horse Bid and Auction Process
Lynrock’s bid will set the floor for an upcoming auction. Edgio owes Lynrock Lake $94.4 million, and under Lynrock’s offer, that debt would be canceled in exchange for ownership of Edgio’s assets. If a higher bid emerges at the auction, Lynrock will receive up to $2 million to cover its expenses, according to court filings.
The stalking horse arrangement allows Edgio to move forward with a potential sale while seeking better offers. The outcome of the auction will determine if Lynrock’s bid remains the winning offer or if another party will secure ownership of the company’s assets.
Edgio Chapter 11 Bankruptcy – Financial Struggles and Debt
Edgio’s financial difficulties have been mounting. The company, formerly known as Limelight Networks, acquired Edgecast Inc. from Yahoo in 2022 and rebranded as Edgio. Despite its efforts to expand its web application services, Edgio struggled to maintain profitability and manage its debt load.
Court papers show that Edgio’s customers and largest unsecured creditors include major corporations such as Amazon Services LLC, Sony, and Disney Streaming Services. These companies may be affected by the bankruptcy process, as Edgio works to restructure its obligations.
Looking Ahead
As Edgio navigates the Chapter 11 bankruptcy process, the company will face challenges in maintaining operations while addressing its debt. The bankruptcy court will oversee the auction and the potential sale of Edgio’s assets.
The case, filed as Edgio Inc., 24-11985, in the U.S. Bankruptcy Court for the District of Delaware, marks a critical turning point for the company. Investors will closely monitor developments, including the auction outcome and any further bids that could influence Edgio’s future.
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