{"id":30768,"date":"2023-05-02T13:50:40","date_gmt":"2023-05-02T13:50:40","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/edtech-chegg-slumps-on\/"},"modified":"2023-05-02T13:53:54","modified_gmt":"2023-05-02T13:53:54","slug":"edtech-chegg-tumbles-as","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/edtech-chegg-tumbles-as\/","title":{"rendered":"Edtech Chegg tumbles as ChatGPT threat prompts revenue warning"},"content":{"rendered":"

By Medha Singh<\/p>\n

(Reuters) -What’s the cost of students using ChatGPT for homework? For U.S. education services provider Chegg Inc, it could be nearly $1 billion in market valuation.\u00a0\u00a0\u00a0\u00a0<\/p>\n

Chegg signaled the rising popularity of viral chatbot ChatGPT was pressuring its subscriber growth and prompted it to suspend its full-year outlook, sending shares of the company 47% lower in early trading on Tuesday.<\/p>\n

“Since March, we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate,” said Chegg CEO Dan Rosensweig.<\/p>\n

There are fears Chegg’s core business could become extinct as consumers experiment with free artificial intelligence (AI) tools, said analyst Brent Thill at Jefferies, which downgraded the stock to “hold”.<\/p>\n

Last month, the Santa Clara, California-based firm said it would launch ChatGPT’s AI powered CheggMate, a study aide tailored to students’ needs, at a time educators were grappling with the consequences of the homework drafting chatbot.<\/p>\n

However, analysts said it was unclear if CheggMate would be enough to counter a slowdown in company’s core business.<\/p>\n

“We fear Chegg could start to lose mind-share before CheggMate fully rolls out,” Thill said.<\/p>\n

If losses hold through the session, Chegg would lose $994 million in market capitalization. <\/p>\n

Shares of Chegg’s UK rival Pearson PLC shed nearly 11.5% on Tuesday.<\/p>\n

Chegg said it was suspending its full-year outlook due to uncertainty of the impact on results and targeted second-quarter total revenue between $175 million and $178 million, which fell short of Wall Street expectations of $186.3 million. <\/p>\n

“Chegg has to make significant changes in a rapidly changing environment that is akin to ‘dancing in the rain without getting wet,'” said Arvind Ramnani, analyst at Piper Sandler.<\/p>\n

(Reporting by Medha Singh in Bengaluru, additional reporting by Aditya Soni; Editing by Shinjini Ganguli)<\/p>\n

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By Medha Singh (Reuters) -What’s the cost of students using ChatGPT for homework? For U.S. education services provider Chegg Inc, it could be nearly $1 billion in market valuation.\u00a0\u00a0\u00a0\u00a0 Chegg signaled the rising popularity of viral chatbot ChatGPT was pressuring its subscriber growth and prompted it to suspend its full-year outlook, sending shares of the […]<\/p>\n","protected":false},"author":8,"featured_media":30769,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[1223],"class_list":["post-30768","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business","tag-updated"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ410DZ-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/30768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=30768"}],"version-history":[{"count":2,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/30768\/revisions"}],"predecessor-version":[{"id":31039,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/30768\/revisions\/31039"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/30769"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=30768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=30768"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=30768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}