Image: A lawsuit filed last month in federal district court argues that the education-technology company Chegg misled investors by failing to make clear the company’s growth was a temporary effect of the migration of courses online in response to the pandemic and was “largely due to the facilitation of cheating—an unstable business proposition—rather than the strength of its business model or the acumen of its senior executives and directors.”
The suit—along with a flurry of announcements from law firms announcing investigations of possible violations of federal securities laws by Chegg and soliciting potential plaintiffs—comes after Chegg’s stock price fell by about half immediately following release of its third-quarter earnings on Nov. 1.
Among other services, Chegg offers a subscription-based online service through which students can submit specific questions and receive answers 24 hours a day from an “expert.” Many academic integrity and higher education experts worry about the extent to which students are using