Murtazin’s blog appears not to have that claim today, but he is cited as stating such by Todd Haselton in a piece this morning on BoyGeniusReport.

A Nokia spokesperson, however, tells The Wall Street Journal’s Christopher Lawton a short while ago that, “These rumors are completely baseless.”

Murtazin has speculated as recently as May 16th that the two companies were talking about a deal.

Microsoft shares are down 54 cents, or 2%, at $24.47.  Nokia shares are down 34 cents, or almost 5%, at $6.68.

Well, at least one believer this morning is Brian White with Ticonderoga Securities, who follows Apple (AAPL) and has a Buy rating and a $612 price target on that stock.

“We believe reports from Boy Genius highlighting the potential for a Microsoft purchase of Nokia for $19 billion should provide Apple investors with even greater confidence that the company can continue to gain market share at the expense of legacy vendors in the mobile phone market,” writes White.

“In our view, Apple investors could not ask for a better deal, and we believe a transaction would only further Apple’s market share gains in the coming quarters.”

Sounds like White is choosing his words carefully, but it also sounds like he believes the rumor.

Article courtesy of Tech Trader Daily

I count three downgrades today, in all, from Goldman Sachs, Sanford Bernstein, and Canaccord Genuity.

As I wrote following that announcement, the bears warned that the worst may not yet be over in terms of the deterioration of the existing business, and that the partnership to develop phones with Microsoft (MSFT) still carries risk.

That’s generally the viewpoint of today’s actions as well. I’ll get to the Goldman and Bernstein notes in a moment.

Mike Walkley at Canaccord Genuity cut his rating to Hold from Buy and cut his price target to $8 from $11, writing that he is “increasingly concerned about sales for Nokia’s Symbian devices during the transition period.”

The vaunted Nokia distribution channel has in fact broken down in China, the company indicated, and the head of operations there has been let go. “Nokia indicated it had mismanaged inventory levels in China and has fired and replaced the head of its China distribution operations.”

Walkley cut his 2011 EPS estimate to $20 cents from 54 cents, and cut his 2012 EPS estimate to 28 cents from 83 cents, but he still thinks Nokia’s phones based on Windows Phone could become a viable third platform, after Apple’s (AAPL) iOS, and Google’s (GOOG) Android, and he models a profit of 83 cents in 2013, on a rebound in sales to €44.9 billion from a likely €39.7 billion in 2012.

Bernstein’s Pierre Ferragu, meanwhile, cut his rating from Market Perform to Underperform, with a $4 target price on the American Depository Receipts, down from $7.33 previously. His target price on Nokia’s ordinary shares goes to €3 from a prior €5.50.

Ferragu notes that he had upgraded the stock on March 11th, when there were 13 Sell ratings on the Street, thinking that investor expectations were low enough to offer some upside on the shares. But yesterday’s cut means the “worst case” scenario that he had imagined is, in fact, crystalizing.

The introduction of the Windows-based phone “will be challenging,” he thinks, “given the likely loss of traction and visibility of the Nokia brand, as well as the speed at which the opportunity for a third ecosystem to emerge is vanishing.”

In fact, Ferragu thinks something is happening to Nokia akin to what befell Motorola back when it lost its grip on the number two spot in the phone market:

This new guidance is to us a strong indication that the company is falling into the Motorola-type scenario we have been worried about for some time. We expect Nokia’s smartphone and mobile phone shipments to shrink sequentially in the second quarter, leading to market shares of 19% and 30%, down 19 pts and 5 pts year on year. This precipitous acceleration of market share loss has two major implications. Nokia is now losing visibility in Europe. The brand lost its first spot to Samsung in the first quarter and our recent store visits indicated a dramatic loss of visibility for Nokia: In some stores, we couldn’t see Nokia phones on display above knee level. Nokia’s emerging market share is not well protected. It now seems clear that Nokia’s more stable position in emerging markets and especially in China was artificial. Management advocated that major inventory build-ups artificially increased shipment volumes in the last quarters. We now believe Nokia will face pressure in these markets similar to what it has been experiencing in Europe.

Goldman’s Tim Boddy cut his rating to Neutral from Buy, writing that the company’s “rapid market share loss threatens Nokia’s distribution advantage.”

Boddy writes that his prior convocation that the stock offered upside if new Windows phones succeeded failed to anticipate how quickly the business would deteriorate.

“With Nokia unlikely to have a full Microsoft- based smartphone line-up across all price points before mid-2012, risks to revenues remain material, threatening Nokia’s ability to retain its distribution relationships and retail footprint when new products arrive.”

Boddy cut his EPs estimate for this year to 17 cents from a prior 53, and cut 2012′s estimate to a loss of 1 penny, versus a prior estimate of 70 cents per share.

And like Ferragu, he draws parallels with the old Motorola’s troubles when it lost its position in phones:

We believe the parallels between Nokia’s situation and Motorola in 2007/8 are becoming more similar. We still argue that Motorola’s position was more precarious, given its dependence on a slim number of high end ‘hit’ models for its profitability, a structurally unprofitable EM business and a weaker balance sheet, but a clear lesson from Motorola’s challenges (or, for that matter, Sony Ericsson’s) is that it is both difficult and time-consuming to rebuild distributor, retail and supplier confidence in your brand once market share has collapsed.

Things that were an advantage for Nokia, moreover, such as in-house manufacturing, may come to be a liability, Boddy believes. For one thing, of the company’s 59,000 employees in its handset operations, about half are based in developed markets. That might make it tough for the company to restructure if it wanted to shift resources to emerging markets where the upside is greater.

Article courtesy of Tech Trader Daily

Article courtesy of %source%

I’m going to one-up Mark Twain in the quantity department and spin two yarns about jumping frogs, one which has been frequently told, the other not so much. Neither of them have anything to do with Samuel Clemens’ heralded short story, but both, metaphorically at least, describe our current investment markets and how to think about the future. My first story is the one you’ve all heard about. Put a frog in a kettle of boiling water and he’ll jump out faster and further than any of those blue ribbon winners at the Calaveras County jumping frog contest. Put him in a pot at room temperature, however, slowly turn up the temperature to boiling, and you’ll have frog legs for dinner. This latter, more unfortunate toad temporarily adapted to his external environment, which seemed like a practical thing to do, until – well, until he reached 212° at which point he was cooked. Today’s bond investors are experiencing a similar fate with nary a “ribbet” of complaint.

[...]

All right fellow frogs, so we’re being repressed and shortchanged in order to allow Uncle Sam to balance its books. Whatta we gonna do about it? “Frogs of the world unite,” as Lenin might have said, and so here’s where I harken back to Mark Twain and my second lesser-told frog story. There was this other frog who instead of being tossed into a pot of hot water was left to cool its heels in a pitcher of cold milk. Unable to jump out, he churned and churned those frog legs until eventually the milk turned into butter and the hardened butter allowed him the platform to leap to froggy freedom! Well, let’s get churnin’, fellow frogs. If the U.S. or the U.K. or any other government is going to attempt to boil us alive, let’s make butter! Butter in this instance is what PIMCO characterizes as “cheap bonds.” Potentially confusing, “cheap bonds” is really a simple concept – sort of like the teeter-totter. Any bond, even a Treasury bond, is composed of several pieces – sort of like an atom with its neutrons, electrons, protons, positrons, neutrinos (whoops, don’t wanna go too far here). There’s an interest rate or yield piece, commonly measured by “duration.” There’s a credit piece, typically referred to as a “spread” when you buy a corporate bond. And there’s a volatility piece, a liquidity piece and other little bits and particles that will go unexplained for now. The important point, though, is that if the government is going to artificially repress yield, then an intelligent frog should focus on the parts of a bond that are less repressed! You can, for instance, produce a 1% expected return in today’s market in a number of ways. Buy a repressed 3-year Treasury note at just under 1%, or purchase an A-rated corporate floating rate note (FRN) with little to no durational risk at a 3-month LIBOR +75 basis points spread, currently returning 1%. Which is the better deal? Well, they both appear to lead you to the same place but our cheap bonds argument would maintain that the FRN gets you there with a lot less risk. The credit piece, in other words, is a safer spread than the duration piece.

Journalists, financial advisors, and perhaps even some clients marvel at how PIMCO can be doing so well in 2011 while being underweight the Treasury/durational component of the bond market. Folks – we’re making butter. If you’re being repressed, our strategy is to churn those legs, get out of the pitcher, and above all stay away from boiling pots of water.

Buy Cheap Bonds With Safe Spread [PIMCO]

Article courtesy of Dealbreaker

Article courtesy of Dealbreaker

AdGrok’s advertising platform simplifies the process of running internet marketing campaigns for small businesses that aren’t very familiar with the web. And while those campaigns focus on Google Adwords, the new focus will be on developing Twitter’s “monetization platform”.

“When Twitter approached us and asked if we’d be interested in working on their monetization platform, we realized that this was a once-in-a-lifetime opportunity that we just couldn’t pass up,” McEachen said.

At this point its unknown what shape that platform will take, but its a good bet that it will have many of the same features and statistics found in AdGrok’d “GrokBar”, except tailored to promoted and featured tweets.

As mentioned in a previous report, the purchase of AdGrok may signal that Twitter is ready to start formulating what kind of data is relevant to performance rather than rely on third-party services to do it. One thing that is very certain is that Twitter is looking to create a much more involved advertising platform for clients wishing to promote their messages through Twitter.

Effective immediately AdGrok is closing the service to new customers and will stop charging all current clients. The service will officially be taken offline June 30, and its existing databases will be deleted. Although the company does note that all past performance data and such will still be available to view through Google Analytics.

Twitter purchased the Y Combinator-backed startup for less than $10 million, according to rumors covered by TechCrunch.

Tags: acquisition

Companies: AdGrok, Twitter

People: Matthew McEachen

Article courtesy of VentureBeat » deals

Einhorn has agreed in principle to purchase roughly 33 percent of the team for $200 million, which will infuse cash and keep the organization solvent in the immediate future. In three years, according to the source, Einhorn has an option to up his stake to 60 percent, although principal owner Fred Wilpon and his family have an opportunity to block Einhorn from gaining that majority stake.

The source said the Wilpons can stop Einhorn from gaining the majority share essentially by returning Einhorn’s initial $200 million investment. In the latest incarnation of the deal, if the $200 million is returned Einhorn’s share of the team will be reduced from a third to a sixth. It was originally reported that Einhorn would retain the 33 percent share of the team.

[ESPN]

Article courtesy of Dealbreaker

The Financial Times’s April Dembosky yesterday wrote that Facebook investor and PayPal co-founder Peter Thiel thinks LinkedIn’s underwriters, Morgan Stanley, Merrill Lynch, and JP Morgan drastically underpriced the company’s IPO two weeks ago, which seems plainly evident given the stock price today is at $85.80, 91% above the $45 IPO price the banks set.

That means LinkedIn left a lot of money on the table for the rich clients of the banks to scoop up in the after-market.

Thiel predicts Facebook, and others, when and if they go public, will drive a much harder bargain to prevent the Street from such terrible under-valuation of their shares.

Granted, there’s a complaint here — no one likes to leave money on the table — but who’s to say the shares are worth what they trade for today — about 20 times this year’s likely revenue?

Article courtesy of Tech Trader Daily

Article courtesy of %source%

Although a number of anecdotes come up in the piece about Apple’s (AAPL) iPhone and iPad, and Google’s (GOOG) Gmail, the article is titled, somewhat more pointedly, “Federal government loosens its grip on the BlackBerry,” meaning, of course, the traditional use of Research in Motion (RIMM) messaging devices.

In part, it’s simply the “consumerization of IT,” as many have identified, and as Kundra maintains, but it’s also RIM’s failure to win third-party developers with a “flexible” software platform, Rosenwald writes.

Rosenwald cites several instances of switchover:

At [Bureau of Alcohol, Tobacco, and Firearms], there are about 50 iPads or iPhones in use, and the number could increase to 100 soon. At the Pacific Northwest National Laboratory, the 1,000 BlackBerrys used last year have dropped to about 700 as workers picked other smartphones. The State Department is testing iPads. Congress now allows iPads and iPhones on the House floor. And the Department of Veterans Affairs is getting ready to allow its clinicians to choose an iPad or iPhone instead of a BlackBerry.

Update: In a note to clients today, Mike Abramsky with RBC Capital Markets, who maintains a Sector Perform rating on RIMM and a $53.45 price target, argues that RIMM will hold onto some clients who prize security above all. Reflecting on the Wash Po article, he writes,

While these developments offer headline risk to valuation and may continue to pressure RIM’s share in the US, BlackBerries are unlikely to lose favor with higher-risk users, as security remains a high priority following recent high profile security breaches and privacy concerns (Lockheed Martin’s secure VPN network was recently hacked, which could slow Android/Apple deployment in regulated industries like banks and the government. The U.S. Senate recently focused on mobile privacy concerns; House oversight committee chair Darrell Issa raised concerns White House employees could circumvent federal record-keeping laws by using iPhone and iPads.

Article courtesy of Tech Trader Daily