M&A News: HubSpot (NYSE:HUBS) Falls Precipitantly as Google Drops Acquisition Plans

HubSpot (NYSE: HUBS) shares fell sharply on Wednesday after reports emerged that Alphabet (GOOGLE) has abandoned plans to buy a software company. According to BloombergWhile Alphabet was in talks with HubSpot earlier this year, those discussions never led to a detailed analysis.

Alphabet would likely face regulatory scrutiny over the deal, as it has recently opposed several major tech acquisitions. For example, Amazon (AMZN) has abandoned its plans to acquire iRobot (IRBT), and for this purpose Microsoft was needed (MSFT) 20 months to complete purchase of Activision Blizzard.

The HubSpot acquisition would allow Google to increase its business software revenue. With a current market capitalization of about $25 billion, it would be twice as much as Google’s largest deal, the $12.5 billion acquisition of Motorola Mobility in 2011.

Are Hubs shares worth buying?

Turning to Wall Street, analysts have a Strong Buy consensus rating for HUBS stock based on 18 Buys, one Hold, and one Sell assigned over the past three months, as shown in the chart below. After an 11% decline in the stock price over the past year, HUBS’s average price target of $681.22 per share implies 40.33% upside potential.