Data Storage Surges Over 50% Amid Strategic Shift, What’s Next?

• DTST stock skyrocketed 54.7% to $5.23, hitting an intraday high of $5.44
• Shareholder-approved sale of CloudFirst to Performive unlocks $85M+ buyback plan
• Dynamic PE ratio soars to 387x as turnover spikes to 346% of average volume

Data Storage Corporation’s shares erupted in after-hours trading following its announcement of a transformative deal to spin off its CloudFirst subsidiary to private equity-backed Performive. The strategic pivot—subject to shareholder approval—has unlocked a dual-value play: immediate buybacks and capital for high-growth sector acquisitions. The stock’s 52-week high of $6.25 looms as a critical technical hurdle.

Strategic Asset Sale Sparks Massive Rally
The surge stems directly from DTST’s July 15 agreement to sell CloudFirst, a key subsidiary, to Performive—a move that frees up capital for a shareholder-friendly repurchase of up to 85% of outstanding shares. CEO Chuck Piluso framed the deal as a rebalancing of corporate priorities, shifting focus to high-growth sectors like AI-driven SaaS and cybersecurity. The transaction’s contingent nature—pending shareholder approval on Sept. 10—adds urgency to near-term price action as investors bet on execution risk.

Technical Breakouts and Leveraged Plays Amid Volatility
• 30D Moving Average: $3.54 (far below current price)
• RSI: 46.15 (neutral, no overbought/oversold extremes)
• MACD: +0.0058 (bullish divergence from price)

The technical picture shows a breakout above the upper Bollinger Band ($3.60), signaling momentum dominance. Short-term resistance at $5.44 (intraday peak) and $6.25 (52W high) must be watched. Traders should consider scaling into longs below $5.00 or wait for a pullback to the 200-day MA ($3.86) for safer entry.

Options Note: While no contracts were listed, a hypothetical bullish play would target in-the-money calls with 30-45 days to expiry. For example, a $5.00 strike call (if available) with 40% implied volatility could offer 3x leverage if the stock breaches $6.00. Aggressive traders should monitor the Sept expiry cycle for liquidity.

Action Hook: Bulls aim for a close above $5.50 to validate the breakout.

Backtest Data Storage Stock Performance
The backtest of DTST's performance after an intraday surge of 55% shows mixed results. While the 3-Day win rate is 44.03%, the 10-Day win rate is slightly lower at 42.39%, and the 30-Day win rate is 45.20%. The maximum return during the backtest period was 0.61% over 30 days, indicating that while there is some potential for gains, the strategy also carries risk.

Hold or Sell? DTST’s Post-Rally Crossroads
Data Storage’s meteoric rise hinges on two critical catalysts: shareholder approval in September and execution of its buyback/acquisition strategy. While the stock’s current surge reflects optimism, traders must weigh the sector’s mixed performance—Telecom Services peer Verizon (VZ) rose just 0.25%—against DTST’s unique value-unlocking play. Watch for resistance at $6.25 and support at the $4.50 opening price. Investors should prioritize risk management: lock in gains if the stock fails to hold above $5.00 or if the CloudFirst deal faces regulatory scrutiny. Final Insight: DTST’s fate now rests on two metrics—approval odds and capital allocation discipline—making it a high-reward, high-risk speculative bet until Sept. 10.