By Sabela Ojea
Shares of Chegg dropped after the company said it's conducting a review of the business and exploring alternatives including a sale or taking it private as the provider of individualized learning support to students keeps losing subscribers to AI-enabled rivals.
The stock declined 21% to $1.24 in post-market trading on Monday. Through the close shares have fallen 82% this year.
The Santa Clara, Calif., company said it hired Goldman Sachs as financial advisor for its review.
The company also said that it has filed a complaint in federal court against Google and its parent company Alphabet for allegedly blocked traffic from coming to Chegg.
Google has "unjustly retained traffic that has historically come to Chegg, impacting our acquisitions, revenue and employees," Chief Executive Nathan Schultz said.
Chegg's business review comes as it swings to a loss in the fourth quarter with revenue falling 24%. The company guided for lower-than-expected revenue for the first quarter.
In November, Chegg said it would cut its workforce by 21%.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
February 24, 2025 17:39 ET (22:39 GMT)
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