Chegg stock was rising after the online education company announced an accelerated stock repurchase plan along with the acquisition of language learning platform Busuu.
Shares of Chegg (ticker: CHGG) rose roughly 5% to $26.06.
The company had lost nearly half its value on Nov. 2 after providing a disappointing earnings report. The stock sank 48.82% on that day thanks to a fourth-quarter revenue projection of $194 million to $196 million, which was well below expectations of Wall Street. Chegg blamed the lucrative job market and school reopenings for the shift away from online education.
The California-based company said it will enter into a $300 million accelerated share repurchase transaction during the fourth quarter. The plan is evidence of “the strength of our balance sheet, and it reaffirms our confidence in the long-term opportunity for Chegg, as well as our continued commitment to enhancing shareholder value,” said Chegg CEO Dan Rosensweig.
Separately, the company announced it was buying language learning startup Busuu in a roughly $436 million deal. The Duolingo (DOUL) rival offers individual and corporate language training.
Chegg expects Busuu’s full-year 2021 revenue to be approximately $45 million with year-over-year growth of greater than 20%, according to a press release.
Analysts tracked by FactSet, on average, rate Chegg’s stock at Overweight, with a price target of $51.54.
Write to Karishma Vanjani at [email protected]
