HubSpot Inc (NYSE:HUBS) shares turned sharply lower in afternoon trading Wednesday following reports that Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) has shelved interest in acquiring the cloud-based customer platform company.

What Happened: According to a Bloomberg report citing people with knowledge of the matter, Google parent Alphabet has ditched its efforts to acquire HubSpot after the two companies failed to reach detailed discussions on a potential deal.

HubSpot shares fell as much as 19% in afternoon trading on the report before bouncing back a bit. The stock was down approximately 12% at the time of writing, per Benzinga Pro. Trading in the stock was briefly halted.

HubSpot stock popped in April following reports that Alphabet was in talks with advisors about making a potential offer to acquire the company. Shares have trended lower since as further developments on the potential deal failed to materialize. Wednesday's sharp selloff marks the worst fall for HubSpot shares since 2020.

According to data compiled by Bloomberg, the potential deal for HubSpot would have been one the biggest this year for a tech company. The deal would have helped Alphabet compete with other players focusing on small to midsize businesses like Microsoft, Oracle and Salesforce.

HubSpot reported total revenues of $2.17 billion in 2023, up 25% compared to 2022. A large majority of the company's revenues are subscription-based. Subscription revenues were up 23% year-over-year in the first quarter. HubSpot had $1.8 billion in cash, equivalents and investments as of March 31.

HUBS, GOOG Price Action: Hubspot shares were down 11.9% at $493.40 at the time of publication, while Alphabet shares were up 1.23% at $192.75, according to Benzinga Pro.

Photo: courtesy of HubSpot.