NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP reminds investors 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.
[Click here to learn more about the class action]
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.
If you purchased or otherwise acquired Direct Digital securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
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