An online tutoring company that once dominated its industry is majorly hurting after just a few months of ChatGPT. As CNBC reports, the CEO of the orange-branded e-tutoring company Chegg admitted during an earnings call earlier this week that the outlook for his company is less than sunny now that its stock is down more than 40 percent. "In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth and we were meeting expectations on new sign-ups," Dan Rosensweig, the company's CEO, said during the Monday night call. "However, 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."
Ups and Downs
Though it was founded in 2005 as a textbook rental site and went public a decade ago, Chegg's value rose exponentially alongside its user base during COVID-19 lockdowns, when distance learning made the need for online tutoring — or, according to some critics, cheating — more pronounced. In early 2021, Forbes put the company on its cover as its stock value more than tripled and its valuation ballooned to more than $12 billion. In just a few short years, however, the company's stock price fell to around $9 at the closing of the markets yesterday, which is notably less than the $12.50 it was valued at during its initial IPO in 2013. Just a few weeks ago, Chegg announced that it's developing its own AI, CheggMate, in partnership with OpenAI to help students with homework. But as analysts who spoke to CNBC note, that probably won't be enough to change its stock trajectory until next year. Given that both of these companies are accused of helping students cheat, it's not exactly surprising that one may be overtaking the other as ChatGPT — the apex predator in this situation — eats its predecessors. More on education: High School Teacher Confesses to Using ChatGPT for Work