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Chegg, Inc. 

The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Chegg, Inc. (“Chegg” or the “Company”) (NYSE:CHGG) securities from May 5, 2020 through November 1, 2021, inclusive (the “Class Period”). Investors have until February 22, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Chegg is a provider of online research tools, online tutoring services, digital and physical textbook rentals, and other educational resources.
On November 1, 2021, Chegg revealed its financial results for the first quarter in which students returned to campus across the United States, and stunned investors with fewer-than-expected enrollments and did not provide 2022 guidance. In fact, CEO and President Dan Rosensweig admitted that defendants were aware of the slowdown in September 2021. On this news, Chegg’s stock price declined by $30.64 per share, or approximately 48.82%, from $62.76 per share to close at $32.12 per share on November 2, 2021.
The lawsuit alleges throughout the Class Period, Defendants made materially false and/or misleading statements and failed to disclose to investors that: (i) Chegg’s increase in subscribers, growth, and revenue had been a temporary effect of the COVID-19 pandemic that resulted in remote education for the vast majority of United States students and once the pandemic-related restrictions eased and students returned to campuses nationwide, Chegg’s extraordinary growth trends would end; (ii) Chegg’s subscriber and revenue growth were largely due to the facilitation of remote education cheating – an unstable business proposition – rather than the strength of its business model or the acumen of its senior executives and directors; and (iii) as a result, the Company’s current business metrics and financial prospects were not as strong as it had led the market to believe during the Class Period.

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