Chegg investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than February 22, 2022 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or acquired Chegg, Inc. (“Chegg”) (NYSE: CHGG) common stock between May 5, 2020 and November 1, 2021, inclusive (the “Class Period”).
Case Background:
Chegg is a provider of online research tools, online tutoring services, digital and physical textbook rentals, and other educational resources.
The complaint alleges that the defendants touted that Chegg was “in a unique position to impact the future of the higher education ecosystem” and that the primary cause of Chegg’s success was its “strong brand and momentum” which would allow Chegg “to continue to grow and take advantage of the ever-expanding opportunities in the learner economy.”
The truth regarding Chegg was revealed after the close of trading on November 1, 2021, when Chegg revealed its financial results for the first quarter in which students returned to campus across the United States. Chegg stunned investors with fewer-than-expected enrollments and declined to provide 2022 guidance. In fact, Chegg’s Chief Executive Officer and President, Daniel L. Rosensweig, admitted that the defendants were aware of the slowdown in September 2021.
Following this news, the price of Chegg’s common stock fell nearly 50%, falling from $62.76 per share on November 1, 2021 to close at $32.12 per share on November 2, 2021.
The complaint further alleges that with the market price of Chegg stock artificially inflated, several of Chegg’s senior officers and directors cashed-in, selling more than $90 million of their personally-held shares.
The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors that: (1) 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 U.S. students and once the pandemic-related restrictions eased and students returned to campuses nationwide, Chegg’s extraordinary growth trends would end; (2) Chegg’s subscriber and revenue growth were largely due to the facilitation of cheating – an unstable business proposition – rather than the strength of its business model or the acumen of its senior executives and directors; and (3) as a result, Chegg’s current business metrics and financial prospects were not as strong as it had led the market to believe..
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.