Chegg stumbled in its market debut, but its chief executive is staying upbeat.
As of midday on Wednesday, shares in the education company were down 20 percent, at $9.96. That’s significantly below its initial public offering price of $12.50, which was above expectations.
It’s an inauspicious debut by any measure. But Dan Rosensweig, Chegg’s chief executive, played down the importance of the first-day trading price. More important, he insisted, was setting up the company for future success.
“It’s another day in a long journey,†he said in a telephone interview. “This was just a financing, just another step.â€
(He may also have been upbeat because Wednesday was his 25th wedding anniversary.)
Mr. Rosensweig describes the opportunity that Chegg has to tap a $1 trillion industry: education. Founded in 2005, Chegg focuses primarily on renting textbooks for a semester at a time, with 180,000 titles in its catalog.
But the company is building its electronic services, which it sees as its future. It offers more than 100,000 electronic textbooks and has rolled out offerings like helping high school students find colleges and scholarships.
During Chegg’s two-week roadshow, Mr. Rosensweig said, investors showed enthusiasm for the start-up’s focus on education. And going public has allowed the company to simplify its balance sheet and raise $187.5 million to help expand.
“It puts us significantly ahead of where we would be if we stayed private,†he said.
And Mr. Rosensweig downplayed concerns that others, like Amazon.com, might move into Chegg’s business through offerings like electronic textbooks.
“Anyone who’s competing with our business isn’t competing on the broader vision,†he said.
