This is on balance a bad announcement. How are you reading this in anyway other than an immediate drop of $1.38mil in ARR???
Yes, there is promise of new partners and their future contribution to ARR but for me today's announcment again reminds me why I got out of this stock.
There is little to no ecenomic moat to their product and it is at risk of constant churn. Users can be added very quickly but they can also cancel on the spot too.
This announcement is saying that some partners (in this case a large one) identify that they can offer a sufficiently similar product themselves and cut Dropsuite out of the mix and save some margin. This should be concerning.
@Thanky is right, there is limited diversification happening here. If overnight Microsoft decide to offer stronger backup services as part of their Office 365 then Dropsuite are in big trouble.
I learnt a lot (through some pain!) from this investment and I can't see things getting much better anytime soon here. At its 14c heights last year it was trading on like a 10-12x multiple of ARR. This proved to be an extremely expensive multiple for an ARR that is proving to be very volitile.
There is also the risk of significant dumping of escrow shares if this SP even tries to get much higher. It will be dumped into.
PS - Directors have not recently bought on market. They just collected performance shares. Read announcements more carefully.
