Updated from 12:14 9.m. EDT

Shares of Sun Microsystems ( JAVA) were nosediving Monday following reports that IBM ( IBM) is withdrawing its offer to buy the company.

IBM took its offer off the table this weekend after Sun terminated IBM's status as its exclusive negotiating partner, according to the Associated Press. A report in The Wall Street Journal suggested the sides might not have completely ended the discussions.

Still, Sun's shares were plunging 23.2% to $6.52 on news that talks between had broken down. The company's stock had initially exploded on the M&A talk, rising almost 80% to to $8.91 at one point last month.

Price has reportedly been a major sticking point in the negotiations between the two firms, with reports emerging last week that IBM had forced the value of the deal down.

Earlier discussions reportedly centered on a $6.5 billion price tag, although The New York Times and The Wall Street Journal reported last week that IBM would probably pay between $9 and $10 a share for Sun, down from a price of about $10 to $11 a share.

The deal, which would be IBM's largest-ever acquisition, was seen as highly opportunistic for the Armonk, N.Y., firm.

By gaining access to Sun's Solaris operating system customers, IBM could boost its presence in the lucrative oil and gas, telecom and government sectors. The firm would also inherit the MySQL database technology which Sun bought for a billion dollars last year, and could also Sun to beef up its cloud computing strategy.

By buying Sun, IBM would also increase the pressure on its rival Hewlett-Packard ( HPQ ), effectively shrinking the server market to just a handful of big-name companies.

An acquisition, however, would also see IBM inherit Sun's problems. The Santa, Clara, Calif.-based firm has earned a reputation for underperforming and has been dogged with execution issues and losses in the last few years.

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