r/wallstreetbets
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u/star-player
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Feb 06 '23
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Chat GPT will ANNIHILATE Chegg. The company is done for. SHORT DD
Alright apes, strap in your seat belts for some logical enough DD.
I like AI/ML, a lot. This shit’s gonna change the world - especially Large Language Models like Chat GPT. It’s like the invention of the search engine on steroids. Chat GPT Passes Medical License Exam, Bar Exam. It will write papers, code, problem solve, strategize for you - you name it. 1 programmer who knows LLMs is worth 4 programmers who don't; learn to use them, or get left in the dust.
But the most obvious, pressing issue is with “get some poor asian kid on the other side of the world to do your homework for you” Chegg. This company has not sufficiently prepared for the reckoning.
I've used Chat GPT for my own Computer Organization & Architecture HW and Computer Science HW (as a learning tool *wink*). It's an amazing, versatile tool if you put sufficient details in the prompt, whiiiiiich is why it’s superior to Chegg.
It can solve problems that haven't even been added to their database yet - like concerning new assignments or material from new professors. You can also ask it to elaborate and explain certain problem-solving steps, which Chegg cannot provide if there's only one solution uploaded - you've got as much as the poor asian kid decided to write down 💀
College students are the most significant demographic of Chegg, and the competition of free vs. $15/mo for generally low cash flow customers is a no brainer. If you’re concerned about the plan for premium Chat GPT, according to CEO Sam Altman “users will still be able to access the chatbot for free” post release.
While Chat GPT doesn't have verification of veracity (truthfulness) nor precise equation manipulation yet, we can expect it and competing AIs to pursue such features moving forward. If equation solver-extraordinaire Wolfram Alpha has been publicly available for the ballpark of a decade, it does not seem like a stretch that this technology will be difficult to implement. Google’s equivalent “Apprentice Bard” is also coming “very soon” according to CEO Sundar Pichai.
Ok so it seemed too good to be true,
so I investigated to see if Chegg was working on integrating AI - since that would be a potential safeguard to retain clients they’ve lost since the pandemic (their peak when everyone was cheating at online school) has dwindled.
Lol.
The normies haven’t even really figured it out yet
They started to realize there might be a problem Jan 18th
And while the CEO swooped in 2 days later to stop the bleeding, he made no substantial defense against the looming threat of Chat GPT and other LLMs coming soon.
Their last big AI news, as far as I've been able to tell, was the acquisition of WriteLab (basically a grammarly type fixer) in May 2018! Present day, they're either internally freaking out or execs are oblivious that their product is about to be made obsolete.
Only 5 days ago are milquetoast, boring investors starting to turn on Chegg. They have no idea of the Chat GPT storm coming.
CHGG is past expiration date, don’t get stuck holding the moldy bag. Puts 2/17 $20
Join the wave - surfs up 🏄🏄🏄
- star-player
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u/VisualMod Turing Test Proctor Feb 06 '23
I agree, CHGG is a poor investment.
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u/rebo9520 Feb 06 '23
It’s a great investment for passing your classes tho
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u/burtburtburtcg Farts in the bathtub 💨🛀 Feb 06 '23
As long as you’re ok with partial credit
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u/rebo9520 Feb 06 '23
Meh it can be hit or miss but you can usually tell if they’re doing the right method.
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u/ChiggaOG Feb 06 '23
ChatGPT doesn’t work well for math problems. You have to program it to access Wolfram Alpha with an on screen keyboard for the extra symbols.
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u/rashaniquah Feb 06 '23
Not even Stackexchange can answer some shady analysis question but it just happens that Chegg has the answer.
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u/cakeslol Hates CSS; is communist Feb 06 '23
quizlet is far better than chgg when it comes to it though
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u/rebo9520 Feb 06 '23
For studying maybe, but like figuring out how to do a homework question no
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u/Naftoor Feb 06 '23
Depends. For simple stuff like bio or chem, history, psychology, absolutely. Especially for exams that have multiple choice answers.
I wouldn’t trust quizlet for engineering homework
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u/Explosive-Space-Mod Feb 06 '23
Chegg stopped being able to help after my sophomore year in structural engineering lol
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u/Naftoor Feb 06 '23
Yeah we used it for statics, some materials engineering questions, and a ton of physics classes. Agree at about the junior year it’s no longer necessary
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u/police1010 Feb 06 '23
ChatGPT isn't advanced enough to solve a unique engineering problem devised by a professor, but an Indian on the other side of the world with an engineering degree will be able to solve it...
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u/SilentSwine Feb 06 '23
Yep, ChatGPT is a language model and isn't there yet for math, engineering or physics related problems. You could argue that maybe long term AI could be a problem for Chegg and try doing a long term short, but Chegg could also easily just announce an AI partnership and then you'll be screwed when the stock soars lol.
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u/takatu_topi Feb 06 '23 •
1)They are almost certainly in this thread right now getting ideas.
2)They have "egg" in their name.
long-dated calls
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u/Ok_Read701 Feb 07 '23
LLMs have been demonstrated to solve math and physics problems. Not chatGPT specifically, but bigger models trained on more specific data.
https://ai.googleblog.com/2022/06/minerva-solving-quantitative-reasoning.html
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u/SkaldCrypto Crypto God Feb 06 '23
Oh yeah it is dawg. Especially if you use the Wolfram Alpha integration.
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u/Okbutbushdid711 Feb 06 '23
Engineering school made me 🏳️🌈for Wolfram's Alpha
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u/TheObservationalist Feb 06 '23
I haven't been in college in over a decade and I'm already riding Wolfram alpha D
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u/NamelessGlory Feb 07 '23
To be honest, you always riding D so this isnt anything to write home about.
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u/s1n0d3utscht3k Feb 06 '23 edited Feb 06 '23
that sounds like a small a rather niche market
also: isn’t advanced enough “yet”
that said, I have no idea about Chegg. 7-8 years ago most international students I knew in Canada used local premium essay writers with some awareness of Chinese ESL and a capacity to write believable (from a mainland student in Canada 3-4 years) and very fast (overnight delivery) B+ essays
the premium was paid for a service
I would imagine Chegg needs to rely on more than ‘engineering homework help’ but maybe more personalized tutoring or basic product services such as textbook rentals
i wouldn’t be especially long in any education services though as i think AI in general is going to reshape how we teach and test students. it’s hard to offer a service for an environment if you don’t know how the environment will look in 10 years.
context: i was an essay writer for years a long time ago. made a lot of money on it. knew a few guys that did too and one guy with a company in china that got pretty rich off it. i probably couldn’t do it now. most of my old consumer segment (rich chinese students) seem to all use chatgpt now.
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u/lUNITl Feb 06 '23
The niche literally is the market. A major draw of the chegg subscription is that you just pay $15 and there is a solved version of your textbook with extensively annotated solutions available. And generally the fastest way to figure out your homework if it isn’t from the textbook is to just find a similar question that’s already been answered and work out the steps yourself. Maybe it’s just because I procrastinated so much that I didn’t have time to wait for a question to be answered, but I don’t think I ever once used the parts of chegg that a language model would replace.
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u/Okbutbushdid711 Feb 06 '23
Can confirm. Those bassstards are great at coming up with never before seen questions
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u/Puzzleheaded_Way_582 Feb 06 '23
so calls?
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u/codemonkey14 Feb 06 '23
OP isn’t accounting for the possibility that Chegg simply gets a ChatGPT license and offers ChatGPT powered support as part of their homework help for a fraction of the cost of an individual ChatGPT subscription (which we all know is imminent) so students keep using Chegg and Chegg has less overhead costs. Calls it is
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u/Neemzeh Feb 06 '23
Please explain how a subscription to Chegg that has a ChatGPT premium cost is cheaper than just using ChatGPT itself??
One thing you need to know about cheaters - they will spend all their effort in finding the most efficient way to cheat. Going directly to the source. Why the fuck do they need Chegg at all.
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u/Boshva Feb 06 '23 edited Feb 06 '23
You really believe ChatGPT will stay free for all?
It is always the same cycle. Be cheaper and more innovative than your competitors, attract a big user base, start with a fair price so noone complains, user base gets attached and comfortable, raise the prices so hard that your customers have to sell their own mothers, squeeze the last dime out of your business, everything goes to shit - rinse and repeat.
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u/f_ptr Feb 06 '23
You’re not kidding, this is literally the model Sam Altman evangelized as president of Y-Combinator.
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u/sr71Girthbird Feb 06 '23
I mean chatGPT plus is already $20/month and "Pro" is $42/month. It seems completely obvious additional tiers ether lower, or enterprise are most likely less than a few weeks out.
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u/batmanatee_ Feb 06 '23
There are open source models that are 80% as good as ChatGPT. Google is soon to launch their version as well. Competition will not let the cost skyrocket
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u/killem_all Feb 06 '23
There’s like a gazillion copies of food delivery apps and they all kill you with service fees.
The same goes to ride sharing apps.
Competition can’t do shit when operative costs are extremely high
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u/batmanatee_ Feb 06 '23
Both of those models are different because there’s additional layer of human cost coming from gig workers. The operational cost of these models is just server costs. I would argue its closer to Netflix, where competition is really strong and prices although have gone up, they haven’t gone up that significantly over time.
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u/galatea2POINT0 Feb 06 '23
It absolutely is going to stay free for all because it's going to be integrated into Bing and they're going to make boatloads of money off of ad revenue.
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u/Slut_Spoiler Has zero girlfriends Feb 06 '23
Why don't we just COPY the code, and PASTE it somewhere else?
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u/Neemzeh Feb 06 '23
That’s not what I said. I said a chatgpt sub will be cheaper than whatever sub you get from Chegg with a chatgpt licence.
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u/lUNITl Feb 06 '23 edited Feb 06 '23
Because the whole business of these language models is customizing parameters for specific business applications. Chegg would pay OpenAI or some other company with an advanced language model money to make them a custom product for their business.
Right now GPT will hallucinate incorrect but convincing responses to a lot of prompts. The real business is being able to parameterize it such that it is better at responding to the types of prompts chegg users will provide. So that way ideally you get a response that is either correct or nudges you towards providing the missing information rather than just making up some bullshit.
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u/batmanatee_ Feb 06 '23
One ChatGPT account can service multiple Chegg accounts so the cost gets distributed
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u/renok_archnmy Feb 07 '23
homework help
Chegg is literally a subscription cheating service.
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u/star-player Feb 06 '23
I did account for it. Short term puts. Also
If you’re concerned about the plan for premium Chat GPT, according to CEO Sam Altman “users will still be able to access the chatbot for free” post release.
Learn to read.
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u/samz22 Feb 06 '23
Cheggs not going anywhere, if anything they would get bought out. They have to much content, and peer responses to questions. Plus they do more than just answer questions. They sell books, have tutoring, and much more.
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u/Adorable_Ad8515 Feb 06 '23
Leave chef alone bro, that websites has provided so many answers for us we owe it to just let it die in peace.
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u/gamerfirstdadsecond Feb 06 '23
nah its fucked. they send registered emails to colleges to catch cheaters
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u/SilentSwine Feb 06 '23
Doesn't Chegg get most of it's revenue from renting out textbooks? You should post your other positions so we can inverse those too
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u/lUNITl Feb 06 '23
There’s also very little growth priced in for such a tiny market cap non dividend paying stock.
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u/unbannednow Feb 06 '23
As a serial cheater, I will say that Chegg is still much better since it usually gives me the exact answer whereas ChatGPT will confidently give me a wrong answer
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u/Dorktastical Feb 06 '23
Thanks for posting this, I entered in to 10 20$ puts immediately after noticing all the people bullish even though the obvious move is down. Next quarter will truly suck for them. At the current price, my puts will 3x purely off intrinsic value :4641:
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u/trowawee1122 Feb 06 '23
This DD was written by ChadGPT.
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u/star-player Feb 07 '23
Considered, but decided against for posterity sake. Still, a high honor 🙇♂️
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u/Daddy_Thick Feb 07 '23
Good! Fuck Chegg… they wrote their own death certificate when they started outing students who used the service during a test to their professors.
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u/jomama823 Feb 06 '23
Just checked AH and you, apparently, are a fucking genius. Burn in hell.
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u/star-player Feb 07 '23
Love the energy 🙌 Only wish I had convinced you sooner and got you on board
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u/NoobCinema75SGF Feb 06 '23
Yeah, not like the management are gonna buy some shoebox AI company for 900x revenue and announce their 'Taking majors steps in to AI assisted learning' at next report, and see the stock up 147% on pure speculation. Wiping out shorts like snot from a windshield before tanking the company.
Nah, that wouldn't happen. Ever.
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u/alaoa Feb 06 '23
Well wish I would have saw this before the close. Would have been some easy degen money
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u/jrhjus Feb 06 '23
Damn, need to start sorting by new instead of popular so could’ve seen this before their earnings miss
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u/AntyETH Feb 07 '23
2 months ago I bought hella puts and wrote DD against Chegg using ChatGPT and posted it here. People didnt listen then
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u/star-player Feb 07 '23
Too early and smart for your own good. I only wish I’d found it sooner for my own personal use
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u/willl280 Feb 06 '23
I will be the first to say thank you these puts are gonna print tomorrow. Hope you followed your own advice.
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u/Fox_Technicals Feb 06 '23
They can just play the reversal card and ask ChatGPT how not to lose their business to ChatGPT taps head
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u/bigdoza Feb 06 '23
The amount of hate you were getting on here made me follow you to Valhalla
Edit: I’m trying to say thanks :)
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u/Hascus Feb 06 '23
You obviously have no clue what Chegg actually does lol. Chegg has answers and specific material from specific courses. There’s so much info that chat gtp won’t be able to give/it would be too inefficient to use chat gtp for.
Hey chat gtp, prepare me for my psych 200 final at regard university “Sorry I have literally no clue what is in that class because I don’t have the lecture notes and past tests like Chegg does”
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u/star-player Feb 06 '23
I've used Chegg lol. Quizlet would be better for what you're talking about.
Chat GPT will write your Psych papers for free5
u/Alex_butler Feb 06 '23
You dont go to Chegg to have Psych papers written though, you go to it for tutoring, specific homework answers, and textbooks.
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u/Hascus Feb 06 '23
Most of the shit is in textbooks too, which ChatGTP presumably doesn’t have access to so it’d be fucking wrong anyways lmao
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u/1QAte4 Feb 06 '23
Chat GPT will write your Psych papers for free
Get kicked out of university for free.
I did a lot of reading and writing for my MA. The assignments that rely on me interpreting data can't be completed by Chat GPT.
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u/Ragefan66 Feb 06 '23
Quizlet lacked an insane amount of homework answers during my time in college. All the times I used Chegg it was specific and complicated answers to very specific textbook questions that ChatGDP just flat out can't answer.
People don't sign up for Chegg to write their Pysch papers, their best use for everyone I've ever known are the specific textbook bases questions that ChatGDP isn't even close to answering.
If this is a short term play, it's a mighty fucking stupid one IMO
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u/star-player Feb 06 '23
ChatGDP
You don't even know what it is, opinion ignored.
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u/Hascus Feb 06 '23
Your opinion should be ignored thats why your post has as many comments as upvotes lmao.
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u/star-player Feb 06 '23
Post has as many comments as upvotes because people already had stocks and calls in CHGG going into today and don't want to be wrong. Engagement is through the roof :)
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u/LarryGlue Based Feb 06 '23
I say short American students who can't solve shit without a foreign students helping them out.
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u/GGprime Feb 06 '23
Chegg offers high quality courses while chatgpt offers high dubious answers, you cannot compare them. Chatgpt is a good addition but it does alot of mistakes all while pretending to be 100% correct. I actually sold my shares at $28 in december though. Chegg just never managed or even tried to enter the European education market, unlike Apple of Microsoft did, especially during COVID.
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u/Ok_Manager3185 Feb 06 '23
Never underestimate a county's willingness to spend their budget. I wouldnt get too confident that the people who pay for educational services will start using something that's free
-the son of a director at a school supply company
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u/mrstealyogurley Feb 06 '23
Looks like the normies read your prompt. dropped 4$ immediately following close. Good call
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u/jcodes57 Feb 06 '23
Once it’s integrated seamlessly with wolfram alpha, it’ll basically be better than the math teachers I ever had.
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u/star-player Feb 07 '23
Even as a former math tutor who prided myself on my work, it’s hard not to agree
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u/yadigmee Feb 07 '23
Congrats op I had the same analysis when I seen they were reporting earnings. Hm contracts are u in?
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u/eurodiablo Feb 07 '23
Great guess. It’s down to $16.30 after hours. Let’s see if it holds. Don’t hold too long.
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u/Doitforchesty Feb 07 '23
Ya, but can it give handjobs behind Wendy’s? Chat GPT may be able to pass the bar exam but how about the degen exam?
On serious note. Nice bit of work on this post.
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u/star-player Feb 07 '23
I’ve heard they’re pairing with Boston Dynamics to make that happen
🤤💦🍆🦾🤖
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u/papacheapo Feb 07 '23
I wouldn’t invest in Chegg; but not for the reasons you mentioned. 10+ years ago, they were trying to make investments into AI and some ideas got pretty far along.
Unfortunately, it was mostly an investment to say that they were working on it. Leadership there makes gut decisions; which is why many of their acquisitions turned out terrible.
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u/Tiny-Positive9529 Feb 10 '23
Got burned in Options last year. So now I'm making smaller bets. But my buy was based on this post. So thanks u/star-player! Will listen to you more in the future.
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u/jigglywigglybiggly Feb 06 '23
I shorted it last year made a $700 return on $50. I might try it again see what happens but I’m literally on my last $250 😢
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u/trutheality Feb 06 '23
You know what, you're right. ChatGPT's barely passible, sometimes straight-up factually incorrect and self-contradictory answers really are on par with the quality of work you get from Chegg.
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u/powerglide76 Feb 06 '23
Ok this is just personal experience, but ChatGPT did one of my Econ assignments in 3 minutes while it would have taken me at least a half hour on my own. You can copy paste your question and it will give you a detailed response to your specific question, something that only Chegg has been able to do before. Chegg will still be useful for engineering majors and the like but ChatGPT is the real deal.
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Feb 06 '23
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u/star-player Feb 06 '23
I did talk about previous trends briefly, but assumed the audience would be capable enough to look into quarterly performance on their own. Possible mistake on my end as a first time poster but thank you for the feedback
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u/Informal_Pen2898 Feb 06 '23
lots of words that assume ChatGPT isnt going to go paid and be way more expensive. $40 US seems to be the guess for everyone.
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u/star-player Feb 06 '23 edited Feb 06 '23
If you’re concerned about the plan for premium Chat GPT, according to CEO Sam Altman “users will still be able to access the chatbot for free” post release.
Learn to read
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u/Informal_Pen2898 Feb 06 '23
lol We're experiencing exceptionally high demand. Please hang tight as we work on scaling our systems.
If you need it for a project youre going to have to pay. If you just want to try to trick it into saying the n word its probably not a big deal. Learn about the key point of your idea before just jumping on the SELL - AI IS TAKING OVER mania.
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u/star-player Feb 06 '23
I guarantee I understand the key point of my idea better than you.
SELL - AI IS TAKING OVER mania is justified if you spend enough time learning how versatile and powerful the tool is.→ More replies (10)
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u/QuirkyAverageJoe Feb 07 '23
Yes. I was about to resubscribe for my Chegg account last night. Then I tried some of the math problems on Chat GPT. It was awesome. Ended up not paying $16 for my Chegg subscription. Hell yeah!
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u/Inevitable_Vast6828 Feb 07 '23
Are you in kindergarten? ChatGPT is notoriously bad at math. I literally have more trouble coming up with math problems it can get right than ones it can get wrong.
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u/Djhegarty Feb 06 '23
Only problem Im seeing with it right now is that it may be too early as most dumbass college kids dont take their head out of their ass and recognize chatgpt is available for them rn. So they just pay the chegg price bc thats the brand name they hear all around campus
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u/star-player Feb 06 '23
First decent criticism I've heard, but with how fast Chat GPT has reached 100 million monthly users I think it's about to become a household name.
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u/WorldsBestPapa Feb 06 '23
It’s reached 100 million as it’s been in the news a lot and many people are checking it out as a novelty. This will drop soon as the new factor wears off until another big announcement drops.
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u/star-player Feb 06 '23
You don't understand how this technology will change the world.
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u/Due_Worker_1476 Feb 06 '23
Also I'm pretty sure anyday now database update is coming for chatgpt. Which basically means that it is going to be even better at doing it's job.Get on this train and let's go for the moon.
*This is not financial advice.
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u/Morawka Feb 07 '23
On the contrary, Chegg actually provides right answers while Chat GPT will confidently give you the wrong answer, and then when you confront it about it's mistake, it'll just apologize and say you're right. ChatGPT is particularly bad at calculating statistics.
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u/PrometheusOnLoud Feb 07 '23
What will be the difference for the end consumer? Chegg is $20/m, what will the subscription version of ChatGPT be? All ChatGPT will do is eliminate competition and draw all customers to itself before upping the price. Fair enough, the service will be better for somethings, but Chegg does what Chegg does because it isn't that hard. If ChatGPT pushes them out, then Chegg's customers will just have to pay more to cover other expenses of a service that does what Chegg does at the same level as they do now.
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u/sassybrat123 Flair Coveter Feb 07 '23
No it won't. Sure GPT it works with some stuff but doesn't work well for other subjects. I will still use chegg
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u/animalover69 Feb 06 '23
ChatGPT refused to produce a court transcript to go along with this. Highly disappointed.
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u/Dushenka Feb 06 '23
1 programmer who knows LLMs is worth 4 programmers who don't
🤣🤣🤣
Damn, you're paying $400'000/year for a junior developer? Sign me up!
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u/Category_Thin Feb 06 '23
I instantly bought 2K worth of Calls on Chegg after reading this. Thanks
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u/AstraVolans_21 Feb 06 '23
We were supposed to be driving in flying cars by now. But all we have is this overinflated AI hype. Yes, it's cool but it will not ' gonna change the world '
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u/armyvet590 Feb 07 '23
chatgbt has mutated into a pink haired liberal with nose piercings.
It's become a woke commie and it'll die
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u/Bakedintheusa Feb 07 '23
Or, people who are stuck in the past will die of old age instead while yelling at the clouds.
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u/VisualMod Turing Test Proctor Feb 06 '23
Discord BanBets VoteBot FAQ Leaderboard - Keep_VM_Alive
Hey /u/star-player, positions or ban. Reply to this with a screenshot of your entry/exit.