Chegg rises after edtech's board approves $200 million increase in share buybacks
Investing.com -- Shares in Chegg, Inc. (NYSE:CHGG) surged in early U.S. trading on Thursday after the education technology company announced that its board of directors had to agree to increase its share repurchase program by $200 million.
In a statement on Wednesday, the company noted that it also has approximately $89M remaining from a prior $2 billion in securities repurchases. Chegg added that it expects to fund the buybacks from its existing cash balance and future cash flows from operations.
The repurchase program has no expiration date and will continue until otherwise suspended, terminated, or modified by Chegg's board, the Santa Clara, California-based firm said.
The news comes after Chegg, a study help subscription service, posted higher-than-anticipated quarterly sales last week, soothing recent concerns that it would fall victim to the rise of generative artificial intelligence chatbots like ChatGPT. It had flagged earlier this year that the so-called large language models being developed following a boom in interest in AI would eat away at its customer base.
Chief Executive Dan Rosensweig also claimed that feedback on Chegg's own generative AI technology has been «very positive.»
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