Data Storage Corp Stock Surges 46% After Hours Amid CloudFirst Deal Buzz

Data Storage Corp (DTST) stock surged 46.45% in after-hours trading following the announcement of plans to sell its subsidiary, CloudFirst, and initiate a share buyback. The stock price jumped from $3.38 to $4.95. The company will use the proceeds from the sale to repurchase up to 85% of its outstanding shares and make strategic acquisitions.

Data Storage Corporation (DTST) stock experienced a significant increase in after-hours trading on July 11, 2025, following the announcement of plans to sell its subsidiary, CloudFirst Technologies Corporation, and initiate a share buyback. The stock price surged from $3.38 to $4.95, marking a 46.45% increase. The company entered into a definitive agreement with Performive, a cloud and infrastructure services provider backed by Renovus Capital Partners, to sell the assets of CloudFirst Technologies Corporation [1].

The transaction is subject to shareholder approval at the company’s annual meeting scheduled for September 10, 2025. If approved, CloudFirst will continue to operate under its established brand with its current leadership and support teams intact. The company expects continuity throughout the approval process and beyond. Data Storage Corporation plans to use the proceeds from the sale, along with existing cash, to repurchase up to 85% of its outstanding shares through a tender offer. Following the share repurchase, the company intends to pursue strategic acquisitions in high-growth sectors, including AI-enabled SaaS, cybersecurity, and healthcare automation [1].

Chuck Piluso, CEO of Data Storage Corporation, commented, “This agreement highlights the long-term value CloudFirst has created and reflects confidence in the future. Although we believe in the strong fundamentals and long-term potential of CloudFirst, we believe that the public markets did not adequately reflect its value.” This transaction positions CloudFirst for continued growth in a private setting, while allowing Data Storage to return value to shareholders and pursue strategic opportunities in high-growth tech sectors [1].

Data Storage Corporation, through its subsidiaries, is focused on providing solutions that ensure business continuity, improvement in business processes, and efficiency, while striving to build shareholder value. The company maintains a healthy financial position with a current ratio of 3.52 and more cash than debt on its balance sheet. Despite recent challenges, such as a decline in Q1 2025 revenue and earnings per share (EPS), the company remains debt-free and holds $11.1 million in cash and marketable securities [2].

The strategic focus remains on high-margin recurring cloud revenue and infrastructure expansion. Data Storage Corporation is also focusing on expanding its operations in the UK, with expectations of generating its first revenue from this expansion in Q4 2025. The company expects business continuity throughout the approval process, noting that CloudFirst has added staff over the past 30 days [2].

References:
[1] https://finance.yahoo.com/news/cloudfirst-join-performive-strategic-growth-204500800.html
[2] https://za.investing.com/news/company-news/data-storage-to-sell-cloudfirst-subsidiary-plans-share-buyback-93CH-3790626