As expected, Yahoo's stock took a hit after the U.S. financial markets opened Monday morning, as investors react to Microsoft's decision over the weekend to give up on acquiring Yahoo.

About an hour after the Nasdaq market opened, Yahoo's shares were trading at $24.22, down by $4.45 or almost 16 percent, from their close on Friday at $28.67.

Yahoo's stock got a boost after Microsoft announced its $44.6 billion acquisition bid on Feb. 1, rising from a close of $19.18 the day before to more than $30 at times in intra-day trading, although its highest post-bid closing was $29.98 on Feb. 14.

Yahoo's board formally rejected Microsoft's original bid on Feb. 11. Microsoft eventually walked away for good on Saturday after its revised offer of $33 per share, a $5 billion increase, was still deemed too low. Yahoo was looking for a $37-per-share offer, Microsoft said on Saturday.

[ For the complete saga of Microsoft's unsuccessful bid to take over Yahoo, check out InfoWorld's  special report. ]

On Sunday, financial analyst Clayton Moran from Stanford Group Company told IDG News Service via e-mail that Yahoo missed a good opportunity by rejecting Microsoft's offer. "We expect the stock to drop materially," he said.

So far, the market is proving him right.

An hour after the markets opened, Google shares were trading at $593.70, up $12.41 or about 2 percent higher than its close Friday, and Microsoft shares were trading at $29.87, up by $0.63 or 2 percent. Though the failure of Microsoft's bid was clearly a disappointment to CEO Steve Ballmer, many industry observers thought that the merging of the companies' overlapping resources would have been tough to pull off.

"Yahoo + Microsoft would have been a disaster -- the best and the brightest from Yahoo would have gone to Google, the culture clash would have been destructive, it would have put Microsoft back in the sights of the regulators," said Forrester CEO and president George Colony in a statement.