Data Storage Corporation (NASDAQ:DTST) Stock Falls Sharply: Should You Buy Now?
Provider of diverse disaster recovery protection and cloud solutions, Data Storage Corporation (NASDAQ:DTST) on July 19, 2021 confirmed entering into purchase agreement with a number of institutional investors for buying $8.3 million of common stock. The agreement will also allow the investors to purchase shares of its common stock in a concurrent private placement under Nasdaq rules. Purchase price for a single share of common stock and 0.75 warrants is $6.04.
DSC will be selling 1,375,000 shares of its common stock and warrants for purchasing about 1,031,250 shares of its common stock. These warrants can be exercised immediately and will lapse on five year and six-month anniversary of the issuance date.
The firm expects proceeds to be $8.3 million before deducting the placement agent’s fees and the offering will close by July 21, 2021. Maxim Group LLC will be the sole placement agent in connection with the offering.
Shares are being given to a shelf registration statement on Form S-3, confirmed by Securities and Exchange Commission of the United States. Warrants issued in the concurrent private placement as well as shares issuable on exercise of such warrants were offered in a private placement.
DSC provides services like IaaS, SaaS, DRaaS, VoIP, IBM Power systems and storage hardware with managed IT services.
Market Reaction:
On Monday, DTST stock slumped 27.61% at $4.30 with more than 1.85 million shares, compared to its average volume of 1.07 million shares. The stock has moved within a range of $4.2400 – 5.2500 after opening the trade at $5.25. Over the past 52-week, the stock has been trading within a range of $0.1200 – 13.1000.
