Chegg, Inc.

On November 1, 2021, Chegg released its financial results for the first quarter in which students had returned to campuses after an extended period of remote education due to the COVID-19 pandemic. Chegg announced fewer-than-expected enrollments and did not provide fiscal 2022 guidance. Chegg’s CEO and president admitted to being aware of the slowdown in September 2021.

On this news, Chegg’s stock price fell $30.64, or 48.8%, to close at $32.12 per share on November 2, 2021, thereby injuring investors.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, 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 United States 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 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 (3) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.