Okay folks, so we got to give a violent update on the market and plays, and then I want to talk about one specific stock that's very well known that is down about 75 from what it was at earlier this year. I want to talk about the numbers with this and pick your brain as to whether this is a buy or not and the only thing that I ask in return is that you hit that ravishing like button and also don't forget to subscribe either. Also, our Black Friday 100 coupon code on ziptraderu for lifetime access to our lessons, our private chat, our daily morning briefings, and of course our price targets is still active. I've kept it open a little bit longer just because we are going to raise the price of the course for the first time and I wanted to make sure that anybody that was interested got a chance to check it out.

And also of course because you know the motto. Okay, so the market's been fighting back and forth. Today was an all-around update. The Dow leading the pack, crypto miners Mara and Riot are having some pain, but a few weeks ago I presented on Minor Hut 8 as a potential diversification play since Riot and especially Mara had factored in so much future growth in such a short time span, and we analyzed a lot of the pros and cons with Hud 8.

pros being specifically diversified revenue streams, more hodling using a form of Ethereum mining as a cheaper way to mine Bitcoin, and we talked about my late 2022 estimates for each in terms of hash rate aka production capacity at least on their end, and Hud 8 trailed Mar and Ryan, but it was also cheaper in market cap per mind 2022 Bitcoin and I said that given a nice dip, I'd start making more of an argument for it. and today, Hud 8 has been leading the sell-off Their reported November production came in today, and they mined less Bitcoin in November than they had mined in October. Now, on the flip side, their new Nvidia deployment has reduced the cost to mine each bitcoin to approximately 3 000, which means unit margins in excess of 95, which is very good, but still less Bitcoin mined in November then in October. That kind of breaks the overall trend at least month over month, and which of course is freaking out.

Hut aid investors as well as a lot of other mining investors because they're like, hey, wait a second. Well, if Hud 8 is struggling, maybe all of them are struggling. Certainly possible that because Hut 8 was upgrading their servers, that you did have a little bit of downtime reducing the numbers. But I think the biggest reason here is network difficulty.

With most companies, you have three different factors that drive growth: the industry that it's in, how good the company is at serving customers instead industry, and the competition in said industry. With Bitcoin month over month, the industry has basically stayed the same. It's been stagnating in the upper 50 to 60 region, and network difficulty has gone up consistently since mid-july Hut 8 has deployed more and more miners throughout that time, which has helped offset that problem. But network difficulty really jumped in November and now it's close to all-time highs, and part of the reason that miners are struggling a little bit more at producing is because we came off of this massive massive dip that had two big factors going for it.

You had China banning mining, which dramatically reduced the competition on the mining network and thus decreased the level of difficulty. and you also had Bitcoins. Prices get hit massively at the same time, which dramatically reduced the amount of incentive there was to mine Bitcoin. and a lot of people just abandoned the whole business model because, oh, I only believe in Bitcoin when it's up.

Those are two major factors that beat down network difficulty. But since that point, you've had what Bitcoin go up dramatically and you've had competition go up to meet said demand. We have rising competition and basically stagnating Bitcoin prices. If Bitcoin was going up, at least the industry was getting bigger.

If Bitcoin was going down, at least they could mine more Bitcoin. But if it's stagnant, you're basically fighting for the same amount of industry with all of these new competitors rising competition without an increasing market. But of course those are just short-term factors. The value of mining companies is how much they can produce and mine and then hold over the long run and offload at much, much higher prices.

It's worth mentioning when I did my Bitcoin miner Mara breakdown back in October, I've used an expected Total Network cash rate at 200 for 2022 and the reason was because even though at the time it was only at 140, you have to assume that competition for miners will go up over time and discount that from the production estimates aka the higher the total network cash rate, the higher the competition and the harder it is for them to make money in Bitcoin mining. But anyways, I think that the production reports for many mining companies are going to be hampered until Bitcoin gives some actual moves either upward or downward. But I would judge miners on the investments that they are making in the current business model, not on what the network is doing, And if you can look at it that way, then you can say okay, well, hey, if it's beat down a lot, it's a good buy. If it's up a lot, hey, well, maybe we should start trimming some profits off the table.

Okay, so time for the main entree. Chegg! Now Chegg is an education company that provides a wide range of student services from textbook rentals, practice problems, online tutoring, proofreading, citation help, and a bunch of other services. This is actually something that has a warm spot in my heart because I used it when I was in college. If I was assigned math homework problems for example, and the professor didn't provide many examples or at least many practical non-theoretical examples which was common, I'd go and look up the textbook on chegg and it would have already written expert answers to each of the problems, show you the work, and then give you practice problems with their own answers as well.

That way instead of reading through the theories and trying to connect the dots that actually have practice problems because that's at least how I learn, I don't just learn by oh, if this goes that way in theory and if you still needed help, it had this little feature where you can go and request live expert help and they would come up with this little chat bubble that had a live whiteboard in a text chat and you could go and ask the questions. They'd write it out and help you, but of course I never used that feature. but as a business and a stock, I mean it was a huge growth story from 2016 values at three dollars and 15 cents to 2019 heights at 47 bucks. and then of course it just went totally parabolic.

During the pandemic, people were staying at home and schools were of course ill-equipped for distance learning. So the demand for chag went up dramatically. And you look at the annual check service subscribers from fiscal year 2016 to 2020. it started with 1.5 million and scaled to 3.9 million over four years.

Then all of a sudden from 2019 to 2020, you went from 3.9 million to 6.6 million. They grew more during that time period than they did in the last four years combined. And you look at where their money comes from. It comes from their wide range of web services, but also to some extent physical textbook rentals, which I'm not as crazy about.

But they do get to depreciate them and offset their gains in terms of brand awareness. They ran a survey asking students what companies, websites and resources can you think of that provide students with their support they need in school, and Chegg was the highest in brand awareness, followed by Amazon, Quizlet, Khan Academy, and Google. I didn't realize that Amazon was an educational option, but Bezos always has something up his sleeve. Learn something new every day.

Although I guess these days he's up his mistress's sleeve or is she in his sleeves or in his pockets? One of us. But anyways, this is a growing company with leading brand awareness and its industry. So why the hell is it selling off? Well, because it got pushed faster than it ever could have expected because of that pandemic stay at Home pump, and as a result, the growth rate just can't possibly sustain itself. so it's selling off.

And the last quarterly report cutting guidance is what really did them in. The Ceo said a combination of variance, increased employment opportunities, and compensation along with fatigue have all led to significantly fewer enrollments than expected this semester, and those students who have enrolled are taking fewer and less rigorous classes and are receiving less graded assignments. We believe this is a post-pandemic impact that will affect the school year, but is not sustainable for higher education long term. So here they're saying, hey, wait a second Well, we have this post-pandemic change in trend, both in terms of academic rigor but obviously also in terms of the overall where they're learning.

but over time after we get out of this weird funky environment that's going to revert again. at least that's what they're saying and I'm reading here. Learning sites and apps both free and paid in the Us and Canada have experienced significantly reduced traffic since the fall semester began. What's he saying here? He's saying, well, hey, it's not just chegg that's falling, it's all of our competitors and the entire industry that's falling.

When you have a smaller industry, you see smaller numbers regardless of how good of a company you are. And quite frankly, obviously I'm not going to say the Czech doesn't deserve to be beat down, but there's certainly a limit behind how much something can be justifiably beat down. I would just take a look and compare check at these prices to what it offered when it was at these prices back in mid 2018. I pulled up the Q2 2018 investor decks and compared relevant data side by side.

In 2018, we had 2.2 million cheque services annual subscribers. At the most recent reports November 1st, they had 6.6 million. Even growth rates from lower numbers back in 2018 were substantially lower. 44 Check Services: Year-over-year revenue growth compared to the most recent report at 57 percent Check Service Subscribers: 45 2018 67 Most recent report adjusted margin has gone from 18.2 to 32.

Meanwhile, you look at the total revenue guidance in 2018. Your full full year guidance that they gave mid-year was 306 million to 311 million and the market was like hell yeah, that's a great deal buy, whereas in 2021 your full your guidance is 762 million to 764 and the market's like shite. We better sell. So basically, we're at the same share price we were at when those 2018 reports came out, but we have in many cases twice as much value.

You're getting a much better, much more developed, much more mature company than you were in 2018, and a much more well-known company that has a lot of subscribers. And then, unlike a lot of the stay-at-home companies that pumped and then dumped massively and are going into negative numbers, Chegg isn't really going into negative numbers, are they yet? You're getting beat down like Chegg is going back to the stone age. And obviously we know that the market is fairly short-term faking in that it likes to very, very much over reward companies that are performing in the current day and over punished companies that aren't. And quite frankly, the growth rates for Chegg just aren't going to be what they were in 2020.

and I would never argue that this is worth 115 bucks. But I would argue there's going to be a case to be made that this starts looking like a very, very good deal. Been beat down so much because you have a lot of people, they're like, hey, I'd rather take a massive loss than have to deal with a couple quarters where Wall Street's like this is a terrible company, this will never come back, only then to find a lot of that capital return. After that, when Chegg re-establishes their growth trajectory, there's this really weird environment right now where you have so many stay-at-home stocks that showed proof of concept during the pandemic that the market just doesn't want to touch at all at much lower prices.

And the only reason is because they're very, very short-term focused. They're like, oh yeah, the internet was only a thing because, well, there was a pandemic. so people ought to stay at home. Long-term people aren't going to get back on the internet.

That's a scam. Internet is for fools. Internet is only something we like to go on when there's viruses out there. But now the long-term trend is still established.

It's just that it got ahead of itself and now you have to deal with a lot of these stocks that also went ahead of themselves. But now they're having a reverse problem. They're getting beat down a lot faster than they should have, and a lot farther than they should have. And that's an inefficiency in my opinion.

I'm not making an argument for a price target on check quite yet, and I'm also not saying buy it or don't buy it, but it's getting to price points where it's getting very, very difficult to refuse. Anyways, that caps off the video. If you have any questions, feel free to reach out to us below or join us on Ziptrader Circle. Of course we do have our Black Friday 100 coupon code, which is still active on Ziptraderu.

If you'd like to sign up for lifetime access to our step-by-step lessons, our private chat, our daily morning briefings, and of course our price targets, I'll put the link below if you're wondering what broker to trade these stocks on. Well, Weeble is also linked below and if you sign up and deposit, you'll get two free stocks valued after quite a lot. So make sure to check them out if you haven't already have a good one and I'll see you in the next video.