Direct Digital Stock Drops 14% After Hours — What's Behind The Slide?
Direct Digital Holdings Inc. (NASDAQ:DRCT) shares dropped 13.9% in after-hours trading on Wednesday, falling to $0.13.
Check out the current price of DRCT stock here.
According to Benzinga Pro data, the stock of the Texas-based company closed on Wednesday at $0.15, down 1.41%.
Settlement Agreement Details
The company filed a Form 8-K with the Securities and Exchange Commission (SEC) on Wednesday, revealing it reached a settlement agreement last week with Continuation Capital Inc.
The agreement releases certain claims held by Continuation Capital related to third-party vendor payables of $3.02 million that were separately assigned to Continuation Capital.
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Share Issuance Terms
Under the settlement, Direct Digital will issue up to 50 million Class A common shares to Continuation Capital.
The exchange price is set at 76% of whichever is lower: the volume-weighted average sale price over a five-day valuation period, or the average of the four lowest closing prices from the most recent five days in that period.
Additional Consideration
The company issued 95,000 Class A common shares as a settlement fee.
A court hearing held the day after the settlement was entered determined that the agreement is fair to Continuation Capital.
Stock Performance
The stock has dropped 90.77% year-to-date.
The stock of the advertising technology company has a 52-week range of $0.12 to $6.59, with a market capitalization of $4.4 million.
Benzinga Edge Stock Rankings indicate that DRCT stock has a negative price trend across all time frames. Track the performance of other players in this segment.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.