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Why HubSpot Stock Plunged 12% Today
It is never pleasant for a shareholder to learn that a potential high-premium acquisition of one of their investments has been canceled. Unfortunately for HubSpot For HubSpot Inc. (NYSE: HUBS) investors, that’s exactly what happened on Wednesday. On the news, market participants aggressively sold off the stock, leaving HubSpot with a 12% price decline on the day.
Media report says takeover talks have failed
That morning, Bloomberg reported that Alphabet is abandoning its bid to acquire HubSpot. Citing unidentified “people familiar with the matter,” the financial news outlet said the two companies “have not reached a point of detailed due diligence discussions.”
Bloomberg reached out to Alphabet and HubSpot for comment; neither offered any comment.
An acquisition deal would likely come at a high price. HubSpot provides customer relationship management (CRM) solutions, an enduringly hot segment in the enterprise technology world.
Owning the company would have immediately and strongly positioned Alphabet as a serious competitor in the small and medium-sized business corner of the market. The company is eager to make inroads into multiple segments of the ever-expanding market. technology sector.
It’s unclear how much deep-pocketed Alphabet would be willing to spend to acquire HubSpot. At the end of its most recently reported quarter, the tech giant had just over $108 billion in cash and short-term investments.
Tough regulatory fight avoided?
Alphabet may also have been deterred by a potential battle with regulators.
Lately, U.S. antitrust authorities have been quite aggressive when it comes to large-scale acquisitions and mergers. One recent example that the administration likely has in mind is the regulatory slog that has been Microsoftnearly two-year effort to acquire video game company Activision Blizzard.
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Alphabet executive Suzanne Frey is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, HubSpot, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Why HubSpot Stock Plunged 12% Today was originally published by The Motley Fool