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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Chegg, Inc. (CHGG)

December 23, 2021 GMT

NEW YORK, Dec. 23, 2021 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Chegg, Inc. (“Chegg” or the “Company”) (NYSE: CHGG) in the United States District Court for the Northern District of California on behalf of investors who purchased or acquired the common stock of Chegg between May 5, 2020 and November 1, 2021, inclusive (the “Class Period”).

According to the Complaint, Defendants failed to disclose to investors that: while Chegg’s stock price was artificially inflated, several officers and directors sold $95 million worth of stock – far exceeding the amount sold in the prior comparable period – including $48 million by the Company’s Co-Chairman, CEO and President and $25 million by the Company’s President of the Learning Services division. Certain putative class members traded contemporaneously with these defendants and were damaged thereby.

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In addition, the Complaint alleges that the Company took advantage of the artificially inflated trading price of Chegg stock by selling more than $1 billion of common stock to investors in a February 18, 2021 secondary offering at the artificially inflated price of $102 per share. Certain putative Class members purchased stock directly in this secondary offering and have standing to assert additional claims against the Company and the underwriters of that offering pursuant to the Securities Act of 1933.

On November 1, 2021, Chegg revealed its financial results for the first quarter in which students returned to campus across the United States, and stunned investors with fewer than- expected enrollments and did not provide 2022 guidance. In fact, CEO and President Dan Rosensweig admitted that defendants were aware of the slowdown in September 2021. Chegg’s stock price plummeted nearly 50% (from over $62 to $32 per share) on more than 45 times the average daily volume as investors realized defendants’ rosy statements about subscribers, growth, and revenues had been misleading, which decline immediately erased billions of dollars in market capitalization.

Investors who purchased or otherwise acquired shares of Chegg during the Class Period should contact the Firm prior to the February 21, 2022 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.