Chegg shares rebound with 17% pop after losing almost half their value on ChatGPT concerns
Summary
Cheggs stock returned to the plus side on Wednesday after the online education company lost half its value a day earlier due to concerns about the potential impact of ChatGPT on its business. CEO Dan Rosensweig told CNBC after the market close on Tuesday that the stocks plunge during regular trading hours was "extraordinarily overblown." The shares had plummeted following Cheggs earnings report late Monday, when the company opted not to give annual guidance because of uncertainty surrounding OpenAIs ChatGPT, the popular artificial intelligence chatbot. While revenue and earnings in the first quarter topped estimates, Rosensweig warned on the call with analysts that ChatGPT was "having an impact on our new customer growth rate." Analysts at Piper Sandler, who have the equivalent of a hold rating on the stock, said in a report that there are significant questions surrounding the pricing model, AI-related expenses and whether advancements in AI "democratize their core offering to the extent that their competitive barriers are lowered."
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