@harryd Your point about acquisition is spot on. The problem with M&A is that it muddies the waters. Sometimes it make sense, for example, $WTC adding small "tuck-ins" to increase geography footprint and elements of supply chain IT capability as part of an explicit, clear and long-standing strategy.

But I worry that it can also be used to create a "smoke-screen" in an attempt to compensate for - or even worse to conceal - weakening organic growth. (I know, as I have been an insider and part of those strategic conversations in a previous life!)

Sometimes an acquisition can be truly transformational. Afterall, look at $PME. But more often than not (70% of the time?) it doesn't add value or destroys value (witness $XROs efforts that all had a good story at the time but didn't deliver).

For now, I have decided to hold on to $DSE. I can see the value propostion of a completely independent back-up entity, and some of my more conservative IT-savvy network have confirmed that, while also admitting that it could be argued to be a conservative approach. But if $DSE can be a leading solution in that space, building out applications like QBO Backup etc., then the global niche could still be very interesting. In fact, the narrowing of focus to situations where more conservative or risk averse client sees value could actually help them execute in what is in reality a vast global market. So I can see a silver lining to the cloud. (Pun not intended.)

So I have concluded that how I manage my modest position will be guided by the numbers of delivery, not the movements of the market or the voices of pundits (no disrespect to Claude). And in doing that I accept the risk of holding a wasting position, in the downside case.

I do think that when Charif gets into the smiling @Strawman star chamber, we have a good set of questions that really get inside what the MSPs are thinking. And I mean we need to find a way to cut through the first pass response which will be "this is old news, the industry has known about it for 18 months, the MSPs haven't changed ..." which is what I expect to hear.

But, to the original point, an acquisition at this stage would likely be a "Red Flag and Out" for me, unless there really was a compelling industrial logic (and I mean compelling, and not a $XRO-esque story or even worse heaven forbid at $BTH-type story.) Charift has not yet articulated, to my knowledge, what a stratetic objective an acquisition would achieve.

@mikebrisy I think you are correct that the core to the DSE thesis would be the on-going relationship with MSP's. I think an important question which I haven't seen answered (if someone knows the answer please let me know!) is the concentration of MSP's.

It's been forgotten by the market but back in 1Q18 DSE lost more than half of their user base when one MSP deactivated for their users:

It was never disclosed (as best as I could find) that one MSP made up more than half of the business, with DSE reporting they had 145 MSP's at the time.

This event raised some serious questions for me that I'm not sure the company has answered despite what appears to be fantastic execution since.

@Wini thats a great question for the next call in August, as well as how MSP incentives are based, how it will influence behaviour vrs what MSFT may do

Thank you for your comprehensive response @harryd. While I cannot articulate it as well as you have here, I am largely in the same boat on recent developments. I have never been a shareholder, and these developments are far from terminal for the biz, but it is hard to arrive at a valuation that can sufficiently discount the risks.