The firm downgraded AOL by two notches to "sell" from "buy" after Verizon Communications (VZ) agreed to acquire the company for $50 per share.
Verizon announced plans to buy the Internet services icon in a $4.4 billion deal this morning, the Associated Press reports.
Cantor said the takeover valuation is "relatively fair" and that a higher bidder is unlikely to emerge.
Also, AOL has held advanced talks to spin off its Huffington Post unit which is valued at more than $1 billion, according to Re/code.
About 21.96 million shares of AOL have exchanged hands as of 10:54 a.m. ET today, compared to its average trading volume of about 951,167 shares a day.
New York City-based AOL is a global media and technology company with a suite of digital brands, products and services.
The company is focused on attracting and engaging consumers by creating and offering digital content, products and services and providing advertising services on both its owned and operated properties and third-party websites.
Insight from TheStreet's Research Team:
Chris Versace commented on AOL in a recent post on RealMoney.com. Here is a snippet of what Versace had to say about the stock: