Chegg parked the reverse split that could save its NYSE listing; the stock is at $0.73
The board shelved a shareholder-approved reverse split in June, drew a fresh NYSE price notice in July, and lost its Google antitrust suit on October 1. Three month-end closes now stand between Chegg and the delisting queue.
Vincent Jiang · 3 min read
A 27-cent gap, first tested October 31
Chegg+1.58% — Chegg, up 1.58 percent today closed at $0.7275 on October 2, an $81.9 million company 1. Compliance takes a $1.00 close on a calendar month's last trading day plus a $1.00 average over the 30 trading days before it 2; the next test is October 31. From $0.7275 that is a rally of roughly 37 percent, and a one-day spike cures nothing, because the average has to arrive too 2.
Cured in May, in trouble again by July
Flagged by the NYSE in December 2025, Chegg cured by end-May 2026 2. Stockholders authorized a reverse split at the board's discretion on June 12; on June 17, compliance restored, the board declined to use it "at this time" 3. On July 24 the exchange was back: average close below $1 through July 23, a second notice in seven months, six months to cure 2. The notice itself kept the option open, saying a cure "may include, if necessary, effecting a reverse stock split," subject to board approval 2. On October 1, Judge Amit Mehta dismissed Chegg's antitrust suit against Google's AI Overviews: "an expectation is not an agreement" 4.
The courtroom route to a re-rating closed
Chegg had argued Google harvested its content for AI answers and starved the site of traffic 4, and management blames AI for a revenue line that ran from $143.5 million in Q4 2024 to $51.9 million in Q2 2026, down 50.7 percent, with Q3 guided to $43–44 million 567. A company worth $14.7 billion in February 2021 is now valued at $81.9 million 18. Mehta wrote the court is not "unsympathetic" to publishers whose content Google repurposes "without compensation," but said he is bound to apply the law "only as it is written" 4.
Quarterly revenue guided to less than a third of its Q4 2024 peak
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q3 '24 | $136.59M |
| Q4 '24 | $143.48M |
| Q1 '25 | $121.39M |
| Q2 '25 | $105.12M |
| Q3 '25 | $77.74M |
| Q4 '25 | $72.66M |
| Q1 '26 | $63.26M |
| Q2 '26 | $51.85M |
| Q3 '26e (estimate) | $43.5M ($43–44M) |
Split, buy back, or drift off the exchange
The balance sheet is clean: the last $33.9 million of convertible notes went out September 1, leaving no debt and about $38 million of cash and investments 9. Against the $81.9 million market cap sits $120.7 million of unused buyback authorization 16. Chief executive Dan Rosensweig calls the stock "undervalued simply because of the amount of cash" it will generate, and an employability platform past 10,000 beta users is rolling out across Chegg and Internships.com starting in the third quarter, through 2027 6. If no month-end cures the price by late January, NYSE suspension and delisting procedures start 2. Suspension halts trading on the exchange, and delisting pushes the stock toward the over-the-counter market 10. From July 1, 2027, one close under 25 cents suspends a stock outright 10.
Chegg's buyback authorization is half again bigger than the whole company
Data
| Value | |
|---|---|
| Buyback authorization left (June 30) | $120.7M |
| Market cap (Oct 2) | $81.9M |
| Cash and investments, pro forma (Sept 1) | $38M |
Three closes and one earnings print
October 31, November 30 and December 31 are the remaining tests 2. The Q3 report, guided to $1–2 million of adjusted EBITDA against Q2's $9.1 million 67, should land between them on the usual cadence, and the split needs no new shareholder vote 3. The board holds the tool, the cash and the calendar; what it does not have is a price.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
