Author argues Chegg Inc. puts are a directional short because AI is displacing its homework-help model ahead of February 9 earnings.
Unpriced research observations (excluded from Calls and Returns):
CHGG — SHORT The author argues Chegg Inc.'s p2p homework-help model is being displaced by free AI tools such as ChatGPT. He expects the upcoming February 9 earnings to be unprofitable and sees long puts as a directional bet on further share-price decline. The recent 25% one-month drop and a two-month put break-even at $0.65 are cited as favorable entry conditions. ambiguous_option_contract
Chegg Inc is a p2p homework help website where students can hire tutors to help them with homework. This is an outdated niche that AI is quickly overtaking. Modern day students use ChatGPT or their ai of choice because it's free and quicker.