Appen Ltd (ASX: APX) shares have been on a rollercoaster ride this week.
Speculation that the artificial intelligence (AI) data services company was a takeover target caused its shares to rocket on Tuesday.
But then news that the non-binding takeover offer on the table from Innodata Inc (NASDAQ: INOD) was significantly less than expected caused Appen's shares to crash back down to Earth.
Unfortunately, this decline has continued on Thursday after the company released a further update on the takeover proposal.
In early trade, the Appen share price is down 17% to 80 cents.
Image source: Getty Images
Appen shares sink on takeover update
As you might have guessed from the share price reaction, this update is not a good one.
According to the release, Appen has been informed that Innodata has walked away from talks and withdrawn its offer for the company.
Innodata appears upset that news of its offer was leaked to the investment community.
It informed Appen that it was withdrawing the indicative proposal on the basis that it was intended to remain confidential.
It is also worth noting that investors in the United States didn't respond positively to news of the offer. Innodata's shares on the Nasdaq index crashed 16% the day the proposal was made public.
They didn't appear to believe that acquiring a company going through such a difficult period would be a smart move by management. Particularly given that Innodata is still operating at a loss.
What now?
With these takeover talks over, Appen will go back to focusing on its turnaround.
It has advised that it will continue to update shareholders in accordance with its continuous disclosure obligations.
Appen shares are down by 67% over the last 12 months.
