Boy, certain micro-cap stocks are having their day in the sun today. One such stock that has exploded more than 160% higher at the time of writing is Direct Digital (NASDAQ:DRCT). This move in DRCT stock has come on volume that’s quickly approaching 100 times the average daily volume for this company.
Direct Digital is a stock that’s only been around for approximately one month. However, up until today’s rally, the momentum for this stock has been mostly to the downside. In fact, Direct Digital still remains approximately 20% below its high, at the time of writing.
That said, such a move for any stock is noteworthy. It appears the company’s end-to-end programmatic advertising platform is one that’s gaining attention right now. The ad tech sector is one that’s driven mainly by a few big players. However, there’s always room for one more, should a given company innovate enough and provide value to its customers.
In the case of Direct Digital, it does appear this move is happening in accordance with a company-specific catalyst. Let’s dive into what investors are watching with this stock today.
What’s Behind Today’s Rise in DRCT Stock?
Today, Direct Digital announced the company has been chosen to partner with the town of Pigeon Forge on advertising and communications work. The hope is that through this partnership, Pigeon Forge’s Department of Tourism will see an uptick in tourism. This is currently a $2 billion industry for the town of 7,000 residents. And with Covid-19 restrictions relaxing across the country, now is apparently the time many jurisdictions want to ramp up their marketing campaigns.
For Direct Digital, this partnership is a key one. Should the company be able to produce a meaningful increase in tourism and taxation revenues for the town, other clients may choose to follow. For a company with such a small market cap, any deal is a big deal. Today, investors have reason to like where Direct Digital is headed.
This details of this five-year agreement are currently being held close to the chest. However, it’s the potential for continued traction that has investors excited today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.