Chegg 2013 Annual Report Download - page 85

• issuance of new or updated research or reports by securities analysts, including the publication of
unfavorable reports or change in recommendation or downgrading of our common stock;
• announcements by us or our competitors of significant products or features, technical innovations,
acquisitions, strategic partnerships, joint ventures or capital commitments;
• actual or anticipated changes in our growth rate relative to our competitors;
• changes in the economic performance or market valuations of companies perceived by investors to be
comparable to us;
• additional shares of our common stock being sold into the market by us or our existing stockholders or
the anticipation of such sales, including if existing stockholders sell shares into the market when the
applicable “lock-up” period ends;
• share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
• lawsuits threatened or filed against us;
• regulatory developments in our target markets affecting us, students, colleges or brands, publishers or
our competitors;
• terrorist attacks or natural disasters or other such events impacting countries where we have operations;
and
• general economic, political and market conditions, such as recessions, interest rate changes and
currency fluctuations.
Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and
continue to affect the market prices of equity securities of companies in general and technology companies in
particular. These fluctuations often have been unrelated or disproportionate to the operating performance of those
companies. We believe our stock price may be particularly susceptible to volatility as the stock prices of technology
and Internet companies have often been subject to wide fluctuations. In the past, companies that have experienced
volatility in the market price of their stock have been subject to securities class action litigation. We may be the
target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert
our management’s attention from other business concerns, which could seriously harm our business.
Future sales of our common stock in the public market could cause our stock price to decline.
Sales of our common stock in the public market or the perception that these sales could occur, could cause
the market price of our common stock to decline. As of December 31, 2013, we had approximately 81.7 million
shares of common stock outstanding. Approximately 66.9 million shares of common stock outstanding are
currently restricted as a result of lock-up or market-standoff agreements and will be eligible for sale at various
times beginning mid-May 2014, subject in some cases to vesting requirements and the requirements of Rule 144
or Rule 701. As these resale restrictions end, the market price of our common stock could decline if the holders
of those shares sell them or are perceived by the market as intending to sell them.
Our insiders who are significant stockholders may control the election of our board of directors and may have
interests that conflict with those of other stockholders.
Our directors, executive officers and holders of 5% of more of our common stock, together with their
affiliates, beneficially owned, in the aggregate, approximately 59% of our outstanding capital stock as of
December 31, 2013 (including options exercisable by those holders within 60 days of that date). As a result,
acting together, this group has the ability to exercise significant control over most matters requiring our
stockholders’ approval, including the election and removal of directors and significant corporate transactions.
This concentration of ownership could have the effect of delaying or preventing a change in control or otherwise
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