Chegg 2015 Annual Report Download - page 72

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Table of Contents
33
• consummate a merger, consolidation or sale of all or substantially all of our assets;
• enter into certain asset sale transactions;
• enter into secured financing arrangements;
• enter into sale and leaseback transactions; and
• enter into unrelated businesses.
These covenants may limit our ability to effectively operate our businesses. Any failure to comply with the restrictions
of any agreement governing our other indebtedness may result in an event of default under those agreements.
Risks Related to Ownership of Our Common Stock
Our stock price has been and will likely continue to be volatile.
The trading price of our common stock has been, and is likely to continue to be, volatile. Since shares of our common
stock were sold in our IPO in November 2013 at a price of $12.50 per share, our stock price has ranged from $4.82 to $11.25
through December 31, 2015. In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our
common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
• actual or anticipated fluctuations in our financial condition and operating results, including as a result of the
seasonality in our business that results from the academic calendar;
• our announcement of actual results for a fiscal period that are higher or lower than projected results or our
announcement of revenues or earnings guidance that is higher or lower than expected, including as a result of
difficulty forecasting seasonal variations in our financial condition and operating results or the revenues
generated by our offerings;
• 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 relationships and 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;
• 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;
• international stock market conditions; and
• general economic, political and market conditions, such as recessions, unemployment rates, the limited
availability of consumer credit, interest rate changes and currency fluctuations.
Furthermore, both domestic and international 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.
If securities or industry analysts do not publish research reports about our business or publish inaccurate or unfavorable
research about our business, our stock price could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry
analysts publish about us or our business. If one or more of the analysts who cover us downgrade our common stock or publish
inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these
analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial
markets, which could cause our share price or trading volume to decline.