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What: Shares of Scholastic Corp. (NASDAQ:SCHL) plunged on Thursday after the company announced that it had canceled its modified Dutch Auction tender offer. At 3 p.m. ET Thursday, the stock was down about 10%, after being down as much as 19% earlier in the day.

So what: On Dec. 28, Scholastic announced the commencement of a modified Dutch Auction tender offer, where the company would purchase up to $200 million worth of its own common stock at a price between $37 and $40 per share. This represented 16.5% of the company's outstanding shares.

Today, Scholastic announced that it had canceled the offer, which was set to expire on Jan. 26. No shares will be purchased by the company, and any previously tendered shares would be returned to shareholders.

One of the conditions of the tender offer was that a decrease of more than 10% in the Dow Jones Industrial Average, the New York Stock Exchange Index, the NASDAQ Composite Index, or the S&P 500 Composite index would allow Scholastic to terminate the deal. With the stock market slumping to start out the year, the NASDAQ Composite Index declined enough to trigger this condition.

Now what: The cancellation of a major share buyback is usually something to be concerned about, but in this case, Scholastic was able to save itself from paying a price that's higher than the current share price by canceling the deal. This cancellation doesn't appear to have anything to do with the business itself, and there's always the chance that a new tender offer is announced at some point in the future.

Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.