HubSpot (NYSE:HUBS) shares plummeted on Wednesday after reports emerged that Alphabet (GOOGL) has scrapped its plans to buy the software company. According to Bloomberg, while Alphabet had been in talks with HubSpot earlier this year, the discussions never advanced to detailed due diligence.
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It’s likely that Alphabet would’ve faced regulatory scrutiny over the deal as the regulators have recently opposed several large tech acquisitions. For instance, Amazon (AMZN) dropped its plans to acquire iRobot (IRBT), and it took Microsoft (MSFT) 20 months to finalize its purchase of Activision Blizzard. Nevertheless, AMZN and MSFT both saw their stock prices continue to trend upward following these events, and it’s likely that GOOGL investors won’t be too concerned about this deal falling through.
A HubSpot acquisition would have allowed Google to expand its business software revenue. With a current market cap of around $25 billion, it would have been double the size of Google’s largest deal – the $12.5 billion Motorola Mobility acquisition in 2011.
Is Hubs a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HUBS stock based on 18 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After an 11% decline in its share price over the past year, the average HUBS price target of $681.22 per share implies 40.33% upside potential.
