Yahoo! stock was hit in early trades as Microsoft backed off from its $33 per share bid. Yahoo! board had declined the takeover bid saying that the deal would undervalue the internet giant. The stock price of Yahoo! fell 19% in the start of the trading session on Monday.

Microsoft CEO Steve Ballmer issued a statement that Microsoft could not reach an agreement with Yahoo!. Microsoft’s bid helped Yahoo! stock to recover very smartly from its 52-week low in late January this year. The Yahoo! stock price quickly jumped to $30 after Microsoft announced $33 for every share of Yahoo!

Citigroup Inc. changed its rating for Yahoo! to "Sell". Yahoo! board was demanding $37 per share while Microsoft was offering only $33. At 10.28 am ET, Yahoo! was trading at $24.22, down by 15.52%. The stock touched an intraday low of $22.97. The trading volume was much higher at 116 million compared to average volume of 26.8 million shares.

Microsoft shares were marginally up at $29.84. Biggest gainer among the sector was Google Inc. The stock was up by 12.4% at $594.