Yahoo shares plummeted nearly 20% in midday trading Wednesday after Microsoft CEO Steve Ballmer said he was done with acquisition talks.
Yahoo shares rose almost 9% Tuesday on news that Jerry Yang would step down from his CEO post, closing at $11.55. By early Wednesday afternoon, however, the shares hit a 52-week low of $9.24 after Ballmer said at a shareholder meeting that a search partnership would be "interesting" but Microsoft had "moved on" from any acquisition deal.
Microsoft had offered $33 per share for Yahoo earlier this year, but Yang and other Yahoo leaders said the offer undervalued the company. Microsoft's shares were down nearly 4% Wednesday, with shares trading at $18.85 in the early afternoon. The Nasdaq Composite was down 3.52% to 1,431.06.
As stocks plunged, the rumor mill ran at full steam around Yahoo's search for a successor.
Several names have surfaced, including Tim Armstrong and Peter Chernin -- the latest candidates to be named as potential successors. The Wall Street Journal cited unnamed sources "familiar with the situation" in reporting that Armstrong, a senior VP at Google, and Chernin, president of News Corp., are among those Yahoo's board is considering.
The Wall Street Journal should know -- it's owned by Rupert Murdoch's News Corp.
Other names that have been floated include Yahoo president Susan Decker, former Yahoo chief operating officer Daniel Rosensweig, and former AOL chief executive Jonathan Miller. Analysts have said it seems likely the company will hire from the outside.
The Journal's article said that Yahoo chairman Roy Bostock is leading a committee to select Yang's successor and that former Viacom chief executive Frank Biondi also sits on the committee.
Yang, who co-founded Yahoo 13 years ago, will remain as "chief Yahoo."