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MELVILLE, N.Y. - Data Storage Corporation (NASDAQ:DTST), a $32.9 million market cap technology company whose stock has gained over 31% in the past six months, announced Friday it has completed the previously announced sale of its CloudFirst business to Performive, a cloud infrastructure provider backed by Renovus Capital Partners.
The transaction, which closed on September 11 after receiving shareholder approval on September 10, generated approximately $40 million in gross proceeds. After fees, taxes, and adjustments, the company estimates net proceeds of $24 million. According to InvestingPro data, DTST maintains a healthy balance sheet with more cash than debt and a strong current ratio of 5.5x, indicating robust liquidity to support its strategic initiatives.
Data Storage Corporation plans to use the proceeds to support targeted acquisitions and investments in digital infrastructure areas, including artificial intelligence-enabled software, graphics processing unit technologies, and cybersecurity. The company will continue operating its telecommunications subsidiary, Nexxis, Inc.
"With the CloudFirst transaction complete, we are in a stronger position to evaluate and execute targeted acquisitions," said Chuck Piluso, CEO of Data Storage Corporation. "We will take a disciplined approach to investing in infrastructure and software businesses that align with our operating capabilities and offer recurring revenue potential."
Under the terms of the deal, the CloudFirst brand, leadership team, and service model will remain intact under Performive’s ownership. No changes are expected to client relationships, staffing, or service delivery.
Data Storage Corporation said it will focus on opportunities that offer recurring revenue and long-term shareholder value while maintaining operational discipline.
The announcement was made in a company press release statement.
In other recent news, Data Storage Corp reported its second-quarter 2025 earnings, revealing a larger-than-expected loss and a revenue shortfall. The company posted an earnings per share of -$0.10, missing the forecasted -$0.01, and reported revenues of $5.15 million, below the expected $6.2 million. Additionally, Data Storage Corp announced supplemental disclosures related to its proposed divestiture of its cloud solutions business. This includes the sale of its subsidiary CloudFirst Technologies Corporation and its interests in CloudFirst Europe Ltd. The announcement follows requests from certain shareholders for more information regarding financial multiples and metrics used in the company’s proxy statement for the asset sale. Shareholders, through their counsel, alleged that the proxy statement omitted material information about the divestiture proposal and requested supplemental disclosures. The financial analyses supporting the transaction were prepared by Cassel Salpeter & Co., LLC, the financial advisor to Data Storage Corp’s board.
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