Chegg Downplayed College Reopening Effects, Investors Say (1)

Chegg Inc. knew its subscriber and revenue increases were temporary effects of the pandemic switch to remote schooling but failed to tell investors, a new suit in federal court in California alleges.

The online education company, whose services include tutoring and textbook rentals, “had no basis to believe that the extraordinary, but temporary, growth trends would continue, but failed to adequately inform investors of that reality,” according to a complaint filed in the U.S. District Court for the Northern District of California.

“We are aware of the complaint and, while we are continuing to analyze it, we view the suit ...