Chegg has another ugly day

|By:, SA News Editor

After diving out of the gate yesterday, Chegg's (CHGG -8.5%) post-IPO plunge only worsened today. Shares have closed down 29% from an offering price of $12.50.

With investors nervous about slowing online textbook rental growth in the face of rising e-textbook competition, as well as ongoing losses, CEO Dan Rosensweig has been talking up his company's efforts to evolve into a provider of higher-margin online education/learning services.

Rosensweig states Chegg's digital businesses now account for 21% of his company's revenue, and carry an 80% gross margin, well above the ~30% GM posted by Chegg as a whole.