Data Storage Corporation finalized its tender offer, buying 5,625,129 shares at $5.20 each, cutting the number of shares outstanding to 2,167,138. The offer, which closed at midnight on January 12, was funded entirely from the company’s cash reserves, leaving more than $10 million on the balance sheet.
The transaction reflects the company’s strategy to streamline its capital structure and free cash for future acquisitions. CEO Chuck Piluso said the firm is focused on “execution and a disciplined acquisition strategy” targeting high‑margin, recurring‑revenue businesses in AI, cybersecurity, and telecommunications.
The tender offer follows the sale of the CloudFirst subsidiary for $40 million, which provided the liquidity to fund the buy‑back. The sale also shifted the company’s focus toward its Nexxis unit, which delivers VoIP and unified communications services, and has shown a 28.2% year‑over‑year revenue growth in Q3 2025.
While the buy‑back reduces dilution and may lift earnings per share, analysts note that only about 72 % of shares were tendered, suggesting some investors remain uncertain about the company’s valuation and future prospects. The market reaction on the announcement day was muted, with the stock falling 12 % despite the capital allocation event.
Management emphasized that the remaining cash position positions the company to pursue “high‑discipline acquisitions” and to invest in technology‑enabled services that can deliver recurring revenue and high margins. The move is part of a broader pivot toward GPU‑based infrastructure, AI, and cybersecurity, aiming to replace legacy, low‑margin businesses with higher‑growth opportunities.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.