Chegg, Inc.

Case Details

Class Period: May 5, 2020 - November 1, 2021
Date Filed: December 22, 2021
Case Number: 5:21cv09953
Jurisdiction: California Northern District Court
icon-casetype Case Type: Securities Case

Case Summary

The complaint charges Chegg, its Chief Executive Officer and Chief Financial Officer, and others with violations of the Securities Exchange Act of 1934. According to the complaint, the defendants made materially false and misleading statements and failed to disclose known adverse facts about Chegg’s business, operations, and prospects, including 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.

On September 7, 2022, the Court appointed Pompano Beach Police & Firefighters’ Retirement System and KBC Asset Management as Lead Plaintiff and Saxena White as Lead Counsel.