Direct Digital Holdings to Delist From Nasdaq After Listing-Rule Failure

What happened

Direct Digital Holdings, Inc. (ticker DRCT), an advertising services company based in Houston, said in an SEC filing on October 21, 2026 that it had given Nasdaq written notice of its intention to voluntarily withdraw its Class A common stock from listing on the Nasdaq Capital Market and from registration under Section 12(b) of the Securities Exchange Act of 1934.

The company said it intends to file a Form 25, the notification of removal from listing and registration, with the SEC on or about November 2, 2026. It expects the delisting to take effect about ten days later, on or about November 12, 2026, and the Section 12(b) registration to terminate 90 days after the Form 25 filing, on or about January 31, 2027.

After that, the company said it intends to file a Form 15 to deregister its securities under Section 12(g) and suspend its reporting obligations under Section 15(d).

The company's board authorized the withdrawal on October 20, 2026. The filing states that on October 1, 2026, Nasdaq notified the company that, based on its failure to comply with Nasdaq Listing Rule 5550(b)(1), Nasdaq had determined to delist the stock, and that trading has been suspended since October 5, 2026.

What the company said about its reasons

The filing lists the factors the board weighed. They include that trading on Nasdaq has been suspended since October 5, 2026; that the stock is already quoted on OTC Markets, along with its trading volume and price there; that the company did not have sufficient grounds to appeal Nasdaq's delisting determination; and that it was unlikely to be able to meet the listing requirements of Nasdaq or another national securities exchange at this time.

The board also cited the costs of maintaining registration and complying with Exchange Act reporting, the limited benefits of continued listing and registration given the trading suspension, and the demands continued compliance places on management's time and company resources. The board noted that Nasdaq had not yet filed its own Form 25 and that a voluntary filing would give certainty on the timing of the delisting and deregistration.

The filing states that the stock is currently quoted on the OTC Markets' OTC Pink "Limited Information" tier under the symbol "DRCT" and is expected to continue to be quoted after the delisting and deregistration. The company said it may discuss with broker-dealers the possibility of quoting on a higher information tier of OTC Markets, but that no decision or arrangements have been made. It also said there can be no assurance a market for the stock will be maintained on OTC Markets and that stockholders may find it harder to buy or sell shares.

What this means

A Form 25 is the document that removes a security from an exchange listing and from registration under Section 12(b). Either the company or the exchange can file it; here the company chose to file first, which it can do under Nasdaq Listing Rule 5840(j). The filing says the board chose to act because Nasdaq had not yet filed its own Form 25, and a company filing sets a known timetable.

The underlying failure cited by Nasdaq is Listing Rule 5550(b)(1), one of the Nasdaq Capital Market's continued-listing standards. The filing does not spell out what that rule requires or which of its thresholds the company missed, so the specific shortfall is not established by these sources.

The trading suspension since October 5 is why the withdrawal changes little in practice for holders right now: the shares are already not trading on Nasdaq. What changes is the paperwork and the disclosure regime. Terminating Section 12(b) registration and then filing a Form 15 to suspend Section 15(d) reporting obligations means the company would stop filing the periodic reports — annual, quarterly and current reports — that public companies registered with the SEC must produce. The filing cites the cost of that reporting as one reason for the move.

The OTC Pink "Limited Information" tier is the lowest information tier at OTC Markets, a separate quotation venue for securities not listed on a national exchange. "Limited Information" means the company provides less disclosure there than at higher tiers.

The company's own risk factors mention "substantial doubt about our ability to continue as a going concern." That language appears in the forward-looking statements section of the filing; the filing does not give further detail on the company's financial condition.

Market reaction

The stock closed at $0.249 on the event date, down 19.68% from the prior close of $0.31, according to the price data provided. Because trading on Nasdaq has been suspended since October 5, 2026, the quoted price reflects trading on OTC Markets rather than on the exchange.