Chegg Shares Surge After Announcing Convertible Note Repurchase

Chegg, Inc. (CHGG) shares saw a significant increase on Monday following the announcement of a repurchase agreement for its 0% convertible senior notes due in 2026. Chegg has entered into private agreements with certain noteholders to repurchase approximately $116.6 million of its outstanding notes for a cash price of $96.2 million. This transaction is part of Chegg's previously announced securities repurchase program.

The repurchase transactions are expected to close on December 3. After the closing, $127.9 million in aggregate principal amount of the notes will remain outstanding, and $207.5 million will still be available for repurchases under the program. This move is aimed at reducing the company's outstanding debt, which is believed to have positively influenced the market's reaction on Monday.

Chegg, known for providing learning support services through its platform, offers AI-powered academic assistance and access to subject matter experts. Earlier this month, Chegg reported financial results for the third quarter that exceeded expectations, although several analysts adjusted their price targets, ranging from $1.50 to $3 per share.

On Monday, Chegg shares closed up 12.2% at $2.26.