What happened

Shares of engineered materials maker Rogers (ROG -0.57%) took a massive hit on Wednesday. The stock opened the morning session 43.7% lower and stayed within a few percentage points of that sharp drop all day. On Tuesday evening, materials and chemicals giant DuPont de Nemours (DD -0.05%) canceled its nearly completed buyout of Rogers, citing regulatory clearance issues.

So what

The acquisition originally offered Rogers shareholders a cash payment of $277 per stub. That was a 46% premium to the volume-weighted 30-day average price of Rogers' stock at the time. The deal cleared most of its hurdles in short order, but Chinese regulators never gave it the final thumbs-up. That approval mattered because Rogers has offices and manufacturing facilities in four Chinese cities. Thirty-four percent of the company's 2021 revenue was collected in the Chinese market.

So exactly one year after the original announcement, DuPont officially rescinded this $5.2 billion buyout bid, sending Rogers a termination fee of $162.5 million instead.

Rogers' stock now trades at roughly $130 per share. That's 32% below the weighted average price just before the buyout was announced.

Now what

Rogers investors started to lose confidence in the DuPont deal in August, when the Chinese government refused to rubber-stamp the contract. Last night, on the eve of cancellation, Rogers' stubs changed hands at $229 per share.

In sharp contrast to Rogers' steep price drop, DuPont stock traded 6.2% higher at 1:50 p.m. ET. The merger was supposed to give DuPont a leg up in Rogers' main markets, including electric vehicle battery materials and advanced antennas for high-speed wireless networks. In the end, DuPont's shareholders don't seem to mind losing that edge and sending over that juicy termination fee. Nobody likes the uncertainty of an unfinished merger. That dark cloud has been removed.

Rogers will soldier on, reviewing its options now that DuPont's offer is off the table. The termination fee will boost the company's cash reserves by 72%, perhaps opening the door to strategies or acquisitions that were too expensive last week.

The stock isn't a slam-dunk buy today, since there are many question marks around how Rogers moves forward from this stalemate. However, Rogers remains an indirect but robust bet on electric vehicles and 5G networking. Today's far lower share price could make it an interesting double play on those explosive markets.