Chegg Shares Skyrocket on Accelerated Share Repurchase Agreement

Chegg (ticker: CHGG), the educational software provider, saw its shares surge by 18% to $10.52 following the announcement of an accelerated share repurchase agreement worth $150 million. With a market cap of over $1 billion, the company is poised to further enhance shareholder value.

A Strong Position for Growth

Chegg CEO Dan Rosensweig expressed his excitement about the opportunities ahead, emphasizing Chegg's commitment to becoming the most impactful, AI-enabled, personal learning assistant globally. This unprecedented growth is made possible by the company's ability to generate strong free cash flow.

As of September 30, Chegg boasted $261 million in cash and short-term investments. Moreover, they held an additional $413 million in long-term investments, for a combined total of $674 million. This robust financial position allowed Chegg to reduce their convertible note position by approximately $589 million in the last nine months.

Strengthening the Repurchase Program

With the accelerated share repurchase, Chegg has effectively utilized $2.2 billion of their securities repurchase program, which encompasses both stock and convertible notes. Currently, $3.7 million remains on their outstanding securities buyback plan, which was expanded by $200 million in August.