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Investing.com -- Data Storage Corporation (NASDAQ:DTST) stock surged 29% following the company’s announcement of a definitive agreement to sell its CloudFirst Technologies Corporation subsidiary to Performive, a cloud services provider backed by Renovus Capital Partners (WA:CPAP).
The transaction, announced on July 15, requires shareholder approval at the company’s annual meeting scheduled for September 10, 2025. Under the terms of the agreement, CloudFirst will continue to operate under its brand name while becoming part of Performive, with its leadership team and support staff remaining intact.
Data Storage plans to use proceeds from the sale to conduct a tender offer to repurchase up to 85% of its outstanding shares, while maintaining its public listing and continuing operations of its telecommunications subsidiary Nexxis Inc. The remaining funds will be allocated toward acquisitions in growth sectors including AI-enabled SaaS, cybersecurity, and healthcare automation.
"This agreement highlights the long-term value CloudFirst has created and reflects confidence in the future," said Chuck Piluso, CEO of Data Storage Corporation. He added that the company believes public markets failed to adequately reflect CloudFirst’s value, and the transaction will allow Data Storage to return value to shareholders while pursuing strategic opportunities.
The asset sale is subject to customary closing conditions in addition to the required shareholder approval. Data Storage has indicated that CloudFirst operations will continue unchanged during the approval process, noting that the company has added staff in the past 30 days.
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