Direct Digital Holdings, Inc.
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Case Overview
8 Days Left to Seek Lead Plaintiff
Lead Plaintiff Deadline: | Lead Plaintiff Deadline: 07/22/2024 |
Status: | Status: Investigating |
Company Name: | Company Name: Direct Digital Holdings, Inc. |
Court: | Court: Southern District of Texas |
Case Number: | Case Number: 4:24cv01940 |
Class Period: | Class Period: 04/17/2023 - 03/25/2024 |
Ticker: | Ticker: DRCT |
Related Attorneys: | Lead Attorneys: Thomas W. Elrod |
Related Practices: | Related Practices: Securities |
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of Texas on behalf of those who acquired Direct Digital Holdings, Inc. (“Direct Digital” or the “Company”) (NASDAQ: DRCT) securities during the period of April 17, 2023 to March 25, 2024, inclusive (“the Class Period”). Investors have until July 22, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On March 26, 2024, Direct Digital announced that it missed revenue estimates for the fourth quarter of 2023, citing lower-than-anticipated demand, a delay in the release of Tier 1 publishers from beta testing, and proactive efforts by Direct Digital to accelerate its transition towards a “cookie-less” advertising platform. The Company’s CEO also revealed that in the fourth quarter of 2023, it “became clearer” that cookie depreciation would begin in the first quarter of 2024 and that “[a]s such, out team proactively began our transition off of cookies for media transactions.” On this news, the price of Direct Digital shares declined by $10.47 per share, or approximately 39%, from $26.51 per share on March 26, 2024 to close at $16.04 on March 27, 2024.
On April 2, 2024, Direct Digital disclosed that a material weakness had been “identified in [its] review of internal control over financial reporting as of December 31, 2023.” On this news, the price of Direct Digital shares declined $1.31, from $14.82 on April 1, 2024 to close at $12.82 per share on April 2, 2024.
The lawsuit alleges that Direct Digital made false and misleading statements, and failed to disclose material facts, including that: (1) the Company’s transition toward a “cookie-less” advertising environment was accelerated and would impact revenue in 2024; (2) the Company's alternatives to third-party cookies, including planned investments in AI and machine learning to build on first-party data sources, would not be viable alternatives to third-party cookies and similar tracking technologies; and (3) the Company did not have adequate solutions to address the impending phase out of third-party cookies by Google.
On March 26, 2024, Direct Digital announced that it missed revenue estimates for the fourth quarter of 2023, citing lower-than-anticipated demand, a delay in the release of Tier 1 publishers from beta testing, and proactive efforts by Direct Digital to accelerate its transition towards a “cookie-less” advertising platform. The Company’s CEO also revealed that in the fourth quarter of 2023, it “became clearer” that cookie depreciation would begin in the first quarter of 2024 and that “[a]s such, out team proactively began our transition off of cookies for media transactions.” On this news, the price of Direct Digital shares declined by $10.47 per share, or approximately 39%, from $26.51 per share on March 26, 2024 to close at $16.04 on March 27, 2024.
On April 2, 2024, Direct Digital disclosed that a material weakness had been “identified in [its] review of internal control over financial reporting as of December 31, 2023.” On this news, the price of Direct Digital shares declined $1.31, from $14.82 on April 1, 2024 to close at $12.82 per share on April 2, 2024.
The lawsuit alleges that Direct Digital made false and misleading statements, and failed to disclose material facts, including that: (1) the Company’s transition toward a “cookie-less” advertising environment was accelerated and would impact revenue in 2024; (2) the Company's alternatives to third-party cookies, including planned investments in AI and machine learning to build on first-party data sources, would not be viable alternatives to third-party cookies and similar tracking technologies; and (3) the Company did not have adequate solutions to address the impending phase out of third-party cookies by Google.