Chegg (CHGG) Plunges 99% as AI Tools Replace Traditional EdTech Services

6 hours ago 5

Attiya Zainib

Wed, May 20, 2026 astatine 8:54 AM CDT 3 min read

Eagle Point Capital, an concern firm, released its “Spring 2026 Portfolio Update" capitalist letter. A transcript of the missive tin beryllium downloaded here. The steadfast reported a resilient show for the 4th portion emphasizing its long-term, fundamentals-driven strategy, noting that elaborate quarterly returns would beryllium reflected successful lawsuit brokerage statements but reaffirming dependable compounding aligned with its humanities approach. The steadfast attributed its stableness to a disciplined absorption connected “cockroach-like” businesses, durable, mission-critical companies that payment from timeless quality needs, beardown carnal infrastructure, and constricted susceptibility to accelerated technological disruption. Despite an progressively volatile and unpredictable macro situation shaped by geopolitical conflicts, ostentation shocks, and accelerated technological shifts similar AI, Eagle Point expressed a constructive marketplace outlook, arguing that uncertainty and periodic downturns make opportunities for semipermanent investors. The steadfast believes its accent connected resilient industries, fragmented lawsuit bases, and indispensable services positions the portfolio to withstand disruption and proceed compounding implicit time, adjacent arsenic markets look ongoing volatility and structural change. In addition, you tin cheque the Fund’s apical 5 holdings to find its champion picks for 2026.

In its first-quarter 2026 capitalist letter, Eagle Point Capital highlighted stocks similar Chegg, Inc. (NYSE:CHGG). Chegg, Inc. (NYSE:CHGG) is an acquisition exertion institution that provides integer learning services, including textbook rentals, homework help, and online tutoring for students. The one-month instrumentality of Chegg, Inc. (NYSE:CHGG) was 5.83% portion its shares traded betwixt $0.4500 and $1.9000 implicit the past 52 weeks. On May 19, 2026, Chegg, Inc. (NYSE:CHGG) banal closed astatine astir $1.05 per share, with a marketplace capitalization of astir $117.60 million.

Eagle Point Capital stated the pursuing regarding Chegg, Inc. (NYSE:CHGG) successful its Q1 2026 capitalist letter:

"Chegg, Inc. (NYSE:CHGG) is simply a panda with a cautionary tale. The institution spent a decennary gathering a database of 120 cardinal answers to textbook questions and sold entree to students for $20 per month. ChatGPT’s merchandise successful precocious 2022 disrupted Chegg’s concern exemplary overnight. It gave students instant, unlimited, and customized homework assistance for free. Students, notoriously tech guardant and terms sensitive, instantly cancelled their Chegg subscriptions en masse. Three years aboriginal Chegg’s banal has mislaid 99% of its value. Chegg provided a integer work predicated connected accusation scarcity that exertion erased. Chegg’s customers did not person immoderate switching costs, truthful the gait of alteration was accelerated and severe."

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