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TTD.US
id: 1503
The Trade Desk (TTD) AI Platform Rollout Misrepresentation Case
C.D. California
Court2:25-cv-01396
Case number05/09/2024
Class period Start02/12/2025
Class period End- $TTD investors filed a lawsuit against The Trade Desk, alleging the company misled shareholders about the rollout and adoption of its AI-powered ad-buying platform, Kokai.
- On February 12, 2025, Trade Desk reported weaker-than-expected Q4 revenue, revealing that execution challenges had slowed Kokai’s adoption. Following this news, $TTD stock dropped 32%.
Case Details:
Between May 9, 2024, and February 12, 2025, Trade Desk assured investors that the transition from its old ad-buying platform, Solimar, to Kokai was seamless, emphasizing that full adoption would occur by the end of 2024. The company claimed that Kokai’s AI-driven forecasting and optimization tools would significantly enhance ad performance and drive revenue growth.
However, Trade Desk failed to disclose serious execution challenges in migrating customers from Solimar to Kokai. The company encountered technical and adoption issues, delaying the rollout and negatively impacting revenue growth. Despite these struggles, Trade Desk continued to tout Kokai’s success and market adoption.
On February 12, 2025, Trade Desk reported Q4 revenue of $741 million, falling below its previous guidance of $756 million. The company also issued disappointing Q1 2025 guidance of $575 million, missing analysts’ expectations of $581.5 million. During the earnings call, CEO Jeff Green admitted that the Kokai transition had taken longer than expected, acknowledging that the company was still maintaining two separate platforms (Solimar and Kokai), which had slowed operations.
Following these revelations, $TTD stock plummeted 32%.
Based on these events, $TTD investors filed a lawsuit against The Trade Desk, claiming the company:
- It misled investors about the speed and success of Kokai’s rollout and adoption.
- It downplayed the impact of execution challenges on revenue growth and platform migration.
Investors believe Trade Desk misrepresented the progress of its AI platform rollout.
Case Status
Initial Complaint
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
02/12/2025
Filing date
02/19/2025