The complaint charges Chegg (or the “Company”), its Chief Executive Officer and Chief Financial Officer, and others (collectively, “Defendants”) with violations of the Securities Exchange Act of 1934. According to the complaint, 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.
On December 8, 2022, Lead Plaintiffs filed their consolidated complaint. Motion to dismiss briefing is expected to conclude on June 1, 2023 and the Court has scheduled a hearing on the motion to dismiss the consolidated complaint for June 15, 2023.