Every failing company has a point at which the numbers no longer make sense. One such instance is Chegg’s chart. Early in 2021, shares were worth $115; today, they are worth roughly $1. A market capitalization that was once close to $14.7 billion is currently close to $117 million. The silence has a distinct flavor when you stroll through the company’s former Santa Clara campus, which was largely abandoned following two rounds of layoffs in 2025. It’s not the quiet of a business that passed away with a bang. It’s the quiet of one that continues to appear, smaller each quarter.
Chegg used to be a proud, even glamorous, ed-tech brand. The company, which was founded in 2005 and went public in 2013, built its empire on the seemingly straightforward wager that students would pay about $20 a month for tutoring and instant homework answers derived from a database of almost 80 million step-by-step solutions. That wager was very successful for a while. More than five million subscribers were making monthly payments by the peak of the COVID era, and Chegg appeared to be a successful compounder.
| Chegg Snapshot | Details |
|---|---|
| Company | Chegg, Inc. |
| Ticker | NYSE: CHGG |
| Headquarters | Santa Clara, California |
| Founded | July 2005 |
| IPO | November 2013, priced at $12.50 |
| 2021 Peak Share Price | Roughly $115 |
| Recent Share Price | Around $1.05 |
| Market Cap | Approximately $117 million |
| 52-Week Range | $0.45 – $1.90 |
| 2024 Revenue | $618 million |
| Q4 2025 Revenue | $72.66 million, down about 49% year-on-year |
| Subscriber Base | Fell from over 5 million to under 3 million |
| Workforce Reduction | Roughly 53% drop in employees over the year, per TradingView data |
| CEO | Nathan Schultz (since June 2024) |
| Investor Relations Reference | The official Chegg investor portal |
Then ChatGPT appeared. Students quickly discovered that the same answers were available for free, with explanations that were frequently quicker and more understandable. The stock dropped 48% in a single trading session in May 2023 after Chegg’s CEO acknowledged on an earnings call that AI was impeding growth. As the first widely reported instance of generative AI causing tangible harm to a public company, that day became somewhat of a landmark. Since then, the damage has continued. There are now fewer than three million subscribers. In Q4 2025, revenue was $72.6 million, nearly half of what it was in the previous year.
The fact that Chegg’s stock is rising may be the most intriguing aspect of the company right now. Chegg shares have surpassed the S&P 500 by about 60% over the last year and 13% year to date, though not by much in monetary terms. A tiny but steadfast minority of investors believe the market overreacted. In April, Galloway Capital Partners declared that it had a 5.44% stake in the stock and that it was detached from its underlying value. The argument is simple. In 2022, Chegg paid $436 million for the language-learning app Busuu. At today’s market capitalization, you’re essentially getting Busuu, the Skills certifications business, and whatever remains of the legacy platform for less than the cost of one of those components.
It’s difficult to avoid feeling a sort of somber curiosity as you watch this develop. The business has made significant cost reductions, eliminating between $165 million and $175 million in yearly expenses. Despite a halving of revenue in Q2, adjusted EBITDA was approximately $23 million. If you look closely, you can see that Chegg has stabilized into a much smaller, more focused company. Additionally, there is a legitimate claim that the shift to B2B skills training is unproven and that the core homework subscription is still bleeding out.
The earnings report on May 6 will be informative. Investors appear to think that another leg down, a sale, or a strategic change is imminent. None of those results seem to be clearly priced in. Chegg is now the rarest type of stock—the AI-disrupted casualty with a pulse and a few obstinate investors willing to wager that pulse has significance.
