Yet, the shares consistently dropped through Monday's session and finished down more than 7% on the day below $9 a share. They're still at those levels. What was the reason for the apathetic reaction by investors?
Although the various analyst reports were positive, with statements that Chegg is the leading platform connecting pre-, current, and post-college students to advertisers, colleges, and potential employers, most investors seemed concerned that it's a space with too much competition - going after a target demographic that turns over every four years.
Nevertheless, I continue to think that Chegg is a sleeper hit going into 2014 and started accumulating stock a few weeks ago after its post-IPO drop.
Why do I like Chegg in 2014?
Its CEO, Dan Rosensweig, is a winner. I first came to know Dan when he was the COO for Terry Semel back at Yahoo! (YHOO) in the mid-2000s. Dan was highly regarded then -- and for good reason.
It was Dan who:
- flew to China to shake hands with Jack Ma in 2005 and sealed the $1 billion investment Yahoo! made in Alibaba.
- shook hands with Mark Zuckerberg in 2006 to buy Facebook (FB) for $1 billion before the Yahoo! board got cold feet and nixed the deal.
- is just one of those execs just as capable and talented as any other successful tech exec -- yet he doesn't get the same credit as others because he hasn't had a "recent hit."