Wall Street closes at a record for the first time since end of January
Investing.com -- Chegg Inc. (NYSE:CHGG) shares jumped 14% on Wednesday after activist investor Galloway Capital disclosed a 5.44% stake in the online education company and urged management to improve shareholder communication.
Galloway Capital filed a 13D revealing ownership of 6,093,000 shares and sent a letter to CEO Dan Rosensweig expressing belief that the stock is undervalued. The firm stated that Chegg’s current share price reflects a "substantial disconnect from intrinsic value" and that the market is incorrectly pricing the business as though it is in financial distress.
In the letter dated April 8, 2026, Galloway noted that Chegg maintains a strong balance sheet and is expected to exit the year with net cash and no debt. The activist investor called for improved capital markets communication and investor awareness.
Galloway expressed support for management’s plan to separate the company’s business units. The firm highlighted that Chegg’s Skilling segment is generating approximately $72 million in annualized revenue and has potential to grow at a sustained double-digit rate within a $40 billion addressable market. Galloway believes this unit would command a higher technology valuation multiple as a standalone business.
The investor also noted that Chegg’s legacy Academic Services business is likely to generate meaningful cash flow over the next several years, value not reflected in the current share price. Galloway stated that at approximately 0.5x EBITDA, net of cash, Chegg is trading at levels more consistent with a distressed asset than a business with its brand and scale.
The letter also referenced Chegg’s legal action against Google as potentially representing strategic value for the company’s proprietary content.
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