Chegg Inc stock lost almost half its value on Tuesday after the online learning platform’s CEO Dan Rosensweig said that OpenAI’s artificial intelligence-powered language bot ChatGPT is impacting its new customer growth.
Rosensweig said on an earnings call Monday evening that, in the first part of the year that ChatGPT had no noticeable impact on its new account growth. He continued: “However, since March we have seen a significant spike in student interest in ChatGPT.”
“We now believe it’s having an impact on our new customer growth rate.”
Rosenweig added that the company had been on track to meet its goals for the first quarter up until March when GPT-4 was released by OpenAI.
Chegg’s total revenue and subscription services revenue both fell in 1Q, down 7% and 3%, respectively, from the same period in 2022.
Its earnings per share of $0.27 was down from $0.32 in the year-ago quarter but ahead of the consensus analyst expectation per Zacks Consensus Estimate of $0.26.
Chegg shares sank 48.6% at US$9.06 at noon on Tuesday.
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