Chegg (CHGG) Plunges 99% as AI Tools Replace Traditional EdTech Services
Summary
Chegg's stock has lost about 99% of its value as AI tools like ChatGPT undercut its paid homework-help subscription model, prompting mass cancellations. Eagle Point Capital discussed Chegg in its Q1 2026 investor letter while promoting a portfolio focus on resilient, mission-critical businesses amid AI-driven change. The piece explains Chegg built a database of 120 million textbook answers sold for a monthly fee, a model that AI made freely and instantly accessible to students. Chegg traded near $1.05 per share with a market capitalization around $117.6 million, illustrating the scale of the company's decline.
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Education Software
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Chegg
$500M to $1B