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Direct Digital Holdings , Inc. (NASDAQ:DRCT), an advertising services company currently trading at $0.61 per share with a market capitalization of $10.6 million, disclosed on Tuesday the sale of 2,300,000 shares of its Class A Common Stock at $0.001 par value, which resulted in aggregate cash proceeds of $1,387,015 after a discount of $57,795. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 243%. The shares were sold to New Circle Principal Investments LLC under an existing Share Purchase Agreement. This sale, which took place between April 8, 2025, and May 13, 2025, represents more than five percent of the total number of shares issued and outstanding as of April 8, 2025. The transaction comes amid challenging market conditions for DRCT, with the stock down 84% over the past year and showing high volatility with a beta of 6.6.
The sale was made to New Circle, an entity that has affirmed its status as an "accredited investor" under the Securities Act of 1933. Direct Digital Holdings relied on exemptions from the registration requirements of the Securities Act provided by Section 4(a)(2) for these transactions.
The recent unregistered sales have been reported in compliance with the Securities Exchange Act of 1934. The company has filed the necessary documents with the Securities and Exchange Commission, including the Form 8-K, to provide transparency regarding this significant sale of equity securities.
This report is based on the company’s latest SEC filing and does not include any marketing content or subjective assessments. It is intended to provide investors with the facts surrounding Direct Digital Holdings’ unregistered sales of equity securities.
In other recent news, Direct Digital Holdings announced its Q1 2025 earnings, reporting an earnings per share (EPS) of -$0.35, which exceeded analyst expectations of -$0.41. However, the company’s revenue of $8.2 million fell short of the anticipated $16.25 million, indicating a significant shortfall. Despite the revenue miss, the company achieved a gross margin improvement to 29% from 22% year-over-year. Direct Digital Holdings is focusing on cost management and strategic initiatives in digital advertising to drive future growth. Analysts from Noble Capital Markets and Benchmark engaged with the company on its earnings call, discussing the recovery strategy for its sell side business. Direct Digital Holdings maintains a revenue projection between $90 million and $110 million for the full year 2025, with anticipated gains in the latter half of the year. The company is also actively pursuing strategic financing to support growth initiatives.
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