Direct Digital Sheds Investor Suit Over Impact of User ID Shift

Direct Digital Holdings Inc.'s rosy statements about its online advertising business prospects don’t support a securities fraud suit over its transition to “cookie"-less user identification systems, a federal court ruled.

None of the targeted statements “constitute either materially false statements or omissions that would lead a rational investor to rely on them,” Judge Kenneth M. Hoyt said Thursday for the US District Court for the Southern District of Texas. Hoyt dismissed the suit with no chance to re-plead.

The investors alleged that after Alphabet Inc.'s Google unit announced a privacy-oriented initiative that would phase out third-party trackers—called cookies—in January 2020, ...