Yahoo will be hit with a financial shock wave following Microsoft’s announcement that it will not further pursue an acquisition of the company. Yahoo stock was down more than 20% or $5.83 to 22.84 in pre-market trading on Monday. The stock had closed at $28.67 on Friday.

Microsoft was up about 2.3% or $0.67 to $29.91. Google, which is likely the winner of the failed acquisition process, was up sharply, 3% or $17.91 to $599.20.

Yahoo’s market cap was about $40.01 billion on Friday, well below Microsoft’s final offer of about $47.5 billion. Speculations about lawsuits are already emerging, with Reuters reporting that at least seven law firms will be suing the company. "I think it’s pretty hard for the Yahoo board to turn down $33 when they’ve shown no ability to turn around their stock price," Stuart Grant, managing director at law firm Grant & Eisenhofer, told Reuters. "There’s going to be breach of fiduciary duty lawsuits and I must tell you they are looking pretty good right now," he said.

There are rough seas ahead for Yahoo and its co-founder and CEO Jerry Yang. But there is also a good side of the story: Yang now has a chance that Yahoo in fact is worth more than the $47.5 billion Microsoft offered.