Chegg Receives Continued Listing Standard Notice from NYSE

Rhea-AI Summary

Chegg (NYSE:CHGG) has received a notice from the New York Stock Exchange (NYSE) on April 1, 2025, indicating non-compliance with listing standards due to its average closing share price falling below $1.00 over a consecutive 30-day trading period ending March 31, 2025.

The company has a six-month cure period to regain compliance by achieving a closing share price of at least $1.00 and maintaining an average closing price of $1.00 over a 30-day trading period. During this time, Chegg's stock will continue trading on the NYSE, subject to other listing standards compliance.

To address this issue, Chegg plans to evaluate available options, including the possibility of implementing a reverse stock split, which would require board and stockholder approval. Failure to regain compliance could result in NYSE suspension and delisting procedures.

Positive

• Company has six-month cure period to address listing requirements
• Stock continues trading on NYSE during compliance period

Negative

• Stock price has fallen below NYSE minimum requirement of $1.00
• Risk of potential NYSE delisting if compliance is not achieved
• Possible reverse stock split may be needed, which could indicate underlying financial weakness

Insights

Financial Analyst

Chegg's NYSE non-compliance notice represents a significant red flag for investors. With shares trading below $1.00 for 30 consecutive trading days, the company has entered penny stock territory – typically associated with distressed companies and heightened investment risk.

While Chegg has a six-month cure period to regain compliance, their options are The mentioned potential reverse stock split would artificially boost the share price without addressing underlying business challenges. Such corporate actions often signal desperation and frequently precede further declines.

The deterioration to a $57.3 million market cap (from billions at its peak) reflects severe erosion of investor confidence and business fundamentals. Should delisting ultimately occur, consequences would include:

• Dramatically reduced liquidity for existing shareholders
• Forced selling by institutional investors prohibited from holding OTC securities
• access to capital markets for future financing
• Increased borrowing costs
• Diminished ability to use equity for acquisitions or retention

The NYSE compliance issue itself creates a negative feedback loop – the very announcement may trigger additional selling pressure from risk-averse investors, making compliance more difficult to achieve organically without corporate action.

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Chegg, Inc. (“Chegg” or the “Company”) (NYSE:CHGG), the leading student-first connected learning platform, today announced that on April 1, 2025, the Company was notified by the New York Stock Exchange (the “NYSE”) that it is not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing share price of the Company’s common stock as of March 31, 2025 was less than $1.00 over a consecutive 30 trading-day period.

As required by the NYSE, the Company intends to notify the NYSE timely of its intent to regain compliance with the NYSE minimum share price requirement, which may include, if necessary, effecting a reverse stock split, subject to approval by the board of directors and stockholders of the Company. The Company can regain compliance at any time within the six-month period following receipt of the NYSE notice if on the last trading day of any calendar month during the cure period the Company’s common stock has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month.

The notice has no immediate impact on the listing of the Company’s common stock, which will continue to be listed and trade on the NYSE during the six-month cure period, subject to the Company’s compliance with the other NYSE continued listing standards. The Company intends to continuously monitor the closing share price of its common stock throughout the cure period and, as appropriate, will evaluate available options to resolve the deficiency and regain compliance with the minimum share price requirement. In the event that the Company fails to regain compliance with the minimum share price requirement, the Company’s common stock will be subject to NYSE’s suspension and delisting procedures.

About Chegg

Chegg provides individualized learning support to students as they pursue their educational journeys. Available on demand 24/7 and powered by over a decade of learning insights, the Chegg platform offers students artificial intelligence (“AI”)-powered academic support thoughtfully designed for education coupled with access to a vast network of subject matter experts who ensure quality. No matter the goal, level, or style, Chegg helps millions of students around the world learn with confidence by helping them build essential academic, life, and job skills to achieve success. Chegg is a publicly held company based in Santa Clara, California and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release, including statements regarding the Company’s ability to regain compliance with the NYSE minimum share price requirement within the applicable cure period, the Company’s ability to maintain the listing of its common stock on the NYSE, the Company’s intention to monitor the closing share price of its common stock and evaluate available options to resolve the deficiency, including, if necessary, effecting a reverse stock split, and the Company’s ability to continue to comply with other applicable listing standards of the NYSE, are forward-looking statements. The words “will,” “plans,” “expects” and similar expressions are intended to identify these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including reactions from the Company’s employees, vendors, customers, lenders and investors to the Company’s receipt of the NYSE notice of non-compliance, the possibility that the Company is unable to regain compliance with the NYSE minimum share price requirement, or thereafter continue to comply with the NYSE listing standards, the impact of the Company’s commencement of a process to explore strategic alternatives and the outcome of such process, the possibility that the NYSE may delist the Company’s common stock, and the risks and uncertainties set forth in the section entitled “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as well as subsequent filings with the SEC. In addition, new risks may emerge from time to time, and it is not possible for the Company to predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements made. In light of these risks, uncertainties and assumptions, the future events discussed in this press release may not occur and actual future results may be materially different from those anticipated or implied in the forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250404217279/en/

Media Contact: Mansi Bandarupalli, press@chegg.com

Investor Contact: Tracey Ford, IR@chegg.com

Source: Chegg

FAQ

What is the deadline for Chegg (CHGG) to regain NYSE compliance in 2025?

Chegg has a six-month cure period from April 1, 2025, to regain compliance with NYSE's minimum share price requirement.

What price does CHGG stock need to reach to maintain NYSE listing?

CHGG needs to achieve a closing share price of at least $1.00 and maintain an average closing price of $1.00 over a 30-day trading period.

What happens if Chegg (CHGG) fails to meet NYSE's minimum price requirement?

If Chegg fails to regain compliance, its stock will be subject to NYSE's suspension and delisting procedures.

What solutions is Chegg (CHGG) considering to address the NYSE listing issue?

Chegg is considering options including a potential reverse stock split, subject to board and stockholder approval.