NRDY

Nerdy($NRDY) CEO's $27M Share Spree vs Revenue Plunge Creates Investment Dilemma

12/02/2025 13:36

Nerdy Inc ($NRDY) is a small-cap technology company providing online tutoring and educational services to both individual and institutional clients. With a market capitalization of $234 million, this company has recently caught investors' attention due to CEO Charles Cohn's unprecedented share buyback activity. CEO Cohn has purchased over $27 million worth of company shares over approximately 18 months from June 2024 to November 2025. What's particularly striking is his timing and scale of purchases. When the stock price plummeted from $1.59 to $0.83 in August 2024, Cohn purchased over 13 million shares in just three days, investing $12 million. This goes beyond simple "buying the dip" and represents a strong expression of conviction. Even more notable is his purchasing pattern. He showed consistent buying across consecutive 5-day periods in June 2024, massive purchases during the August crash, additional purchases in November-December, and resumed buying in November 2025. In contrast, CFO Jason Pello and CLO Christopher Swenson have been consistently selling their stakes, indicating divergent views even within the management team. However, the financial reality presents a stark contrast to the CEO's optimism. The company has recorded continuous revenue declines and losses through Q2 2025. Q2 2025 revenue fell 11% year-over-year to $45.26 million, with a loss of 7 cents per share. Quarterly results show a persistent declining revenue trend, and analyst consensus remains at 'hold'. In this context, the key question investors must address is: "Who's right - what the CEO sees or what the market sees?" Cohn's persistent and massive share purchases suggest several scenarios. First, he may believe the current stock price ($1.27) significantly undervalues the company's intrinsic worth. Second, there may be undisclosed business transformation or improvement plans. The company has indeed launched AI-powered Learning Platform 2.0, pursuing technological innovation, and learning membership revenue grew 4%, showing some positive signals. Additionally, the company secured a $50 million loan facility in Q3 2025 to improve liquidity. From an investor perspective, the positive interpretation lies in the CEO's level of "skin in the game." A CEO who has invested $27 million of personal assets in the company is unlikely to intentionally destroy shareholder value. Particularly, his purchases at stock price lows are meaningful from a timing perspective. Conversely, warning signals are equally clear. The CFO and CLO's persistent selling may reflect different perspectives on the company's internal financial situation or future prospects. Moreover, the continuing revenue decline trend suggests fundamental business model improvements are necessary. Current analyst price targets of $2.00 suggest approximately 57% upside potential from current levels. However, this target itself has been continuously revised down from $4.50 previously. Moving forward, key metrics investors should monitor include quarterly revenue trends, learning membership growth rates, and actual performance of the AI platform. If revenue decline stops and turns to growth in Q4 2025 or Q1 2026, it would vindicate the CEO's judgment. Conversely, continued revenue decline could create additional downward pressure even from current price levels. In conclusion, $NRDY currently presents an intriguing situation where the CEO's strong conviction clashes with market skepticism. This could represent a high-risk, high-reward investment opportunity, but it's also a double-edged sword that could lead to significant losses if performance improvements don't materialize.