HubSpot stock drops 12% after Google backs out of takeover deal

Key points:

Google abandons acquisition of HubSpot.
HubSpot shares fell 12%.
Alphabet shares are up 38% year-on-year.

Disappointed investors pulled out of the software company after the search giant failed to reach an agreement and abandoned a takeover bid before conducting due diligence.

HubSpot Stocks HUBS fell just over 12% on Wednesday to close at $492.31 per share following a report that Alphabet GOOGLE Google has abandoned plans to acquire the software company. Earlier this year, the search giant was in acquisition talks with HubSpot, but those fell through, according to a Bloomberg report. The two sides “did not reach a point of detailed due diligence discussions.”
Google sharesMeanwhile, it jumped 1.2% during the session, closing at $191.18 a share. Back in April, there were reports that the search giant was in talks with Morgan Stanley bankers about what price to set for the $25 billion online marketing software company. An acquisition of that size would be Google’s largest ever.
If there was a deal on the tableGoogle could find itself in a sea of regulatory scrutiny. Financial regulators have become increasingly reluctant to greenlight big acquisitions in recent years, citing the competition risks of giant corporations taking on small players. HubSpot’s shares are down about 10% for the year, while Alphabet’s are up a solid 38% since early January.