An online tutoring company that used to sit atop the ranks of its industry is facing major difficulties, with its stock plummeting by more than 40 percent in a matter of months. CNBC reported that Chegg’s CEO Dan Rosensweig talked about the company’s struggles on a conference call earlier this week, claiming that their new customer growth rate had been largely impacted by ChatGPT, a competitor that has been quickly gaining traction.
Chegg, a 2005 textbook rental site, first saw its stock reach new heights when distance learning became popular due to the pandemic. By 2021, the company’s value had seen a rapid upwards trajectory of over 300 percent, which was subsequently highlighted on Forbes as the company’s valuation made it a multi-billion-dollar business. However, after the markets closed on Monday, Chegg’s stock was now at a mere $9 per share, which is significantly lower than its initial public offering of $12.50 in 2013.
In an attempt to counter the success of ChatGPT, Chegg recently announced that they have started utilizing their own artificial intelligence system – CheggMate – in partnership with OpenAI to further assist students with their homework. Nevertheless, despite this effort, analysts have explained that it is likely that it will take until 2022 before the company sees any marked improvements to their stock trajectory.
Chegg is an educational technology company that was founded in 2005 and offers online tutoring and textbook rental services. It recently debuted a new AI system, CheggMate, developed in partnership with OpenAI to improve the online tutoring experience provided to its users.
Dan Rosensweig is the CEO of the Chegg Corporation and was the one to speak out about the impact ChatGPT had on their new customer growth rate. He made his statements during the company’s earnings call Monday night and conveyed how despite seeing no noticeable impact from ChatGPT earlier in the year, the landscape had drastically changed since March.
