What They Did
Pearson was the world's largest education publisher, providing textbooks, digital learning tools, and assessment services with a market cap of ~$7.9 billion.
How LLMs Killed Them
When Chegg blamed ChatGPT for its decline in May 2023, Pearson's stock was dragged down on fears that AI would disrupt the entire education publishing sector. Investors panicked that AI could replace textbooks and learning materials.
Timeline
- May 2-3, 2023: Stock fell 15% (~$1.19 billion in market cap lost) in sympathy with Chegg's crash. Pearson actually lost MORE market cap than Chegg did.
- May 9, 2023: Outlined AI integration strategy across its products (Pearson+, MyLab, etc.).
By the Numbers
- Lost $1.19 billion in market cap in two days
- Stock fell 15% in sympathy crash
- Has since largely recovered by embedding AI into products