Observed Signal · May 3, 2023 · Earnings Report · Source: Trending Topics · Impact: 2/5 · Sentiment: Neutral
Chegg Stock Plunges Nearly 50% as ChatGPT Hits User Growth
Chegg, the U.S. edtech company and parent of language app Busuu, saw its stock plunge 48.5% this week after warning that ChatGPT is hurting new customer growth. CEO Dan Rosensweig said that although no impact was visible in the first half of the quarter, student interest in ChatGPT has risen sharply since March and is now affecting new account growth. Chegg reported Q1 2023 revenue of $187.6 million, down 7.24% year over year from $202.2 million. The company, which acquired Busuu for €385 million, is responding by building CheggMate, a GPT-4-based learning assistant trained on its proprietary content, and has opened a waitlist. Other EdTech stocks including Coursera, Duolingo, and Stride also fell. Chegg said it would only provide guidance for the next quarter due to uncertainty around AI's impact.
Highlights how ChatGPT is disrupting subscription-based EdTech models, a signal for AI-driven transformation across digital businesses; relevant to the AI industry but not directly AdTech.
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Key Takeaways & Evidence Grounding
- Chegg's stock fell 48.5% after warning that ChatGPT was impacting new account growth.
- Chegg reported Q1 2023 revenue of $187.6 million, down 7.24% year-over-year from $202.2 million.
- Chegg acquired language-learning app Busuu for €385 million.
- Chegg is building CheggMate, a GPT-4-based learning bot with a waitlist.
- EdTech peers Coursera, Duolingo, and Stride also saw share price declines.
Connected Companies & Entities
6 Entities mapped“The article reports that Chegg's stock fell by almost half (48.5%) this week....”
“Chegg is one of those companies that has become an OpenAI customer....”
“Microsoft has allied itself with OpenAI, the startup behind ChatGPT....”
“Coursera is one of the EdTech stocks that also declined....”
“Even search engine giant Google has lost billions in market capitalization to ChatGPT since Microsoft allied with OpenAI....”
“Duolingo is one of the EdTech stocks that also declined....”
Ontology Mapping & Concepts
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