Direct Digital Holdings, Inc. Class Action Lawsuit
SAN DIEGO, May 24, 2024 (GLOBE NEWSWIRE) — Robbins LLP informs investors that a shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Direct Digital Holdings, Inc. (NASDAQ: DRCT) common stock between April 17, 2023 and March 25, 2024. Direct Digital is an end-to-end, full-service programmatic advertising platform that provides advertising technology, data-driven campaign optimization, and other solutions to markets on both the buy- and sell-side of the digital advertising ecosystem.
For more information, submit a form, email attorney Aaron Dumas, Jr., or give us a call at (800) 350-6003.
The Allegations: Robbins LLP is Investigating Allegations that Direct Digital Holdings, Inc. (DRCT) Misled Investors Regarding its Financial Prospects
According to the complaint, during the class period, defendants failed to disclose 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; (3) the Company did not have adequate solutions to address the impending phase out of third-party cookies by Google; and (4) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the effectiveness of Direct Digital’s platform and related financial results, growth, and prospects.
The complaint further alleges that 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. Defendant Walker 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 common stock 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.
Then, 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, Direct Digital’s stock price fell $1.31, or 10.4%, from $14.82 on April 1, 2024 to close at $12.82 per share on April 2, 2024, further injuring investors.
What Now: You may be eligible to participate in the class action against Direct Digital Holdings, Inc. Shareholders who want to serve as lead plaintiff for the class must file their motions with the court by July 22, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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| Contact: Aaron Dumas, Jr. Robbins LLP 5060 Shoreham Pl., Ste. 300 San Diego, CA 92122 adumas@robbinsllp.com (800) 350-6003 www.robbinsllp.com | https://www.facebook.com/RobbinsLLP/ https://www.linkedin.com/company/robbins-llp/ |
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