National investment loss lawyers KlaymanToskes is investigating brokerage and investment advisory firms, as well as brokers/investment advisors who may have unsuitably recommended investments in Chegg (NYSE: CHGG) to their customers.
Chegg Inc. shares fell 48% last week, as the direct-to-student learning platform has reportedly been impacted by the AI tool ChatGPT. According to the NASDAQ, Jefferies Group LLC downgraded their outlook on Chegg’s stock from “buy” to “hold”.
Chegg shareholders who sustained significant losses as a result of unsuitable recommendations at the hands of their brokerage firm/financial advisor are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation. We do not collect attorneys fees unless we are able to obtain a financial recovery for you.
Chegg’s CEO Dan Rosenweig stated in an earnings call that “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.” “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.”
While Chegg is hopeful that the creation of its own AI product, CheggMate, will mitigate its user losses, Jefferies analyst Brent Thill stated that the impact of Chegg’s new product is uncertain. According to Thill, “While CHGG plans to launch the CheggMate beta this month to a select few, the timing of a full launch is unclear.”
The analyst went on to state “We don’t expect there to be any meaningful impact from CheggMate in FY23, believing any potential impact won’t show up until FY24 at the earliest.” Chegg stated its revenue will reach between $175 million and $178 million this quarter, significantly below analysts’ estimate of $193.6 million.
Brokerage/advisory firms and their brokers/investment advisors have a duty to disclose material facts concerning their investment recommendations, including those involving an investment’s potential risks. A firm’s misrepresentation or omission of material facts concerning investment recommendations is a sales practice violation, and is a basis for liability in a FINRA arbitration claim.
Chegg shareholders who sustained significant losses as a result of unsuitable recommendations at the hands of their brokerage firm/financial advisor are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation. We do not collect attorneys fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com