Direct Digital Holdings Enacts 55-for-1 Reverse Split to Preserve Nasdaq Listing

New updates have been reported about Direct Digital Holdings.

Direct Digital Holdings has approved and scheduled a 55‑to‑1 reverse stock split across all classes of its common stock as it moves to regain compliance with Nasdaq’s $1.00 minimum bid price requirement. The split, effective for trading on a split-adjusted basis beginning January 12, 2026, will reduce the number of outstanding Class A shares from roughly 68.9 million to about 1.3 million, and Class B shares from approximately 9.3 million to 0.2 million, without changing par value or total authorized shares. The Class A shares will continue to trade under the ticker DRCT, but will carry a new CUSIP, 25461T204. CEO Mark Walker framed the reverse split as a critical step to maintain the company’s Nasdaq listing, which he characterized as a strategic asset for investor visibility and for supporting a stronger institutional shareholder base as the company executes its 2026 and longer-term plans.

The transaction is structured to avoid issuing fractional shares; holders entitled to less than a full post-split share will receive a proportional cash payment instead, with Equiniti Trust Company serving as exchange and paying agent. Direct Digital does not expect most shareholders—particularly those holding in street name through brokers or banks—to take any action, and refers investors to its December 15, 2025 proxy statement for operational details. The move comes against a backdrop of elevated risk disclosures, including going-concern doubts, financing constraints, prior financial restatement issues, and the possibility of Nasdaq delisting if listing standards are not met, alongside competitive and regulatory pressures in digital advertising. Management is signaling that preserving the listing, simplifying the capital structure through a sharply lower share count, and stabilizing the share price are central to its strategy as it seeks to secure capital, manage lender covenants, and navigate an increasingly complex adtech environment.