Notes on Chegg

Chegg is an intriguing brand in the higher education space.  The company is radically transforming itself from a place to buy and sell textbooks, to a student services company.  Here are a few things i'm noting on the company.

• Every chance they get, they compare themselves to some famous tech company.  They're the Facebook of this, the LinkedIn of that and the Uber of tutoring.  All this name dropping makes you wonder.  The CEO mentions communicating the story a lot....   
• They mention matching students with scholarships, colleges and internships.  If they can pull that off, it seems like a huge opportunity.  
• They pass out stock options like candy: 

That is nearly 8% of Chegg's $718 million market cap paid out to insiders in a single year. How does a board approve that? $CHGG

— Asif Suria (@AsifSuria) May 9, 2015 

Technicals 

 It's traded in a post earnings gap range since February.  The trends are flat to higher and price is now above them.  Will buyers show up at the flat 50D MA?  If they can break it over 9, a push to 11 is feasible.  Note the clear demand at the 200D MA if price ever gets there.

The premise of Chegg digital is very interesting and they have a better foothold than any brand in the space.  That said, the loose management practices are a red flag.  It's almost like management is trying to talk up shares into their critical fall quarter.  They might be set up to disappoint in the fall quarter, but the stocks technical position is fine for now.  Heck even here at the 50 day MA is a decent place to look long.

Trade 'em well!