Microsoft signaled Friday that it could rescind its offer to buy Yahoo at $31 a share.

Microsoft and Yahoo executives met earlier this week but the talks ended in a standstill. Microsoft execs, who had earlier hinted that they would not raise their bid, refused to pay the $40 per share that Yahoo demanded, a source familiar with the matter told Fortune.

A Yahoo spokeswoman declined to comment.

The source said that Microsoft doesn’t plan to revoke its offer, but is merely using a tactical maneuver called “market signaling” to put pressure on Yahoo’s board of directors. Microsoft is broadcasting to Wall Street that Yahoo’s stock would become vulnerable it if withdraws its bid.

The software giant has said that it does not need to raise its offer because it doesn’t believe Yahoo has any alternative but to accept the deal. Yahoo has repeatedly stated that Microsoft’s offer significantly undervalues the company and formally rejected the offer in February.

After Reuters reported Friday that Microsoft was “evaluating” its offer, Yahoo shares slipped 6% in after-hour trading. The software giant made its $44.6 billion offer on Jan. 31. The deal is now valued at about $42 billion.