Shares of Microsoft (MSFT) have been under pressure this morning, and one thing appearing to contribute to downturn are rumors the company would step in to purchase Nokia (NOK) for $19 billion, according to remarks by Eldar Murtazin, a blogger widely credited with scooping Microsoft’s deal with Nokia earlier this year.

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

In case you missed it, The Wall Street Journal had a couple pieces on the gadget wars this morning: A report by Stuart Weinberg says that Research in Motion (RIMM) is on track to sell half a million units of the PlayBook tablet computer in the quarter ending this month, a feat Weinberg calls, “A respectable entrance into the competitive tablet market.”

(I should note BoyGeniusReport’s Jonathan Geller on Friday wrote that the PlayBook’s sales have “fallen far short of expectations,” citing an anonymous source at “a major big box retailer.”)

Also in today’s Journal, Justin Scheck and Ben Worthen chronicle Dell’s (DELL) failed bid to offer consumer electronics, having “pulled the plug” on initiatives such as a music player and an online music store. “Apple-like success hasn’t followed” Dell’s purchase of Zing, a software maker that was supposed to kick-start Dell’s music efforts, the authors write.

The sidebar to that piece is an autopsy of the failure of Dell’s first tablet computer, the $500 “Streak” that was roundly panned when it appeared last year. Scheck and Worthen write that anonymous sources expect Dell may delay a 10-inch version of the Streak, expected this summer, until later in the year because of necessary bug fixes.

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Not what Research in Motion (RIMM) needed, exactly: The Wall Street Journal’s Stuart Weinberg this morning reports that the company has recalled 1,000 PlayBook tablets “that were shipped with faulty operating systems” that prevented its performing basic setup.

Most of the affected devices are still in distribution, but some may have been sold and RIM should be contacted directly about any faulty devices.

RIM shares this morning are down 19 cents, or 0.4%, at $43.05 in early trading.

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Or may he did and “patently ill-advised” and “grossly wrong” were compliments?

From The Gartman Letter:

“Finally, The Wall Street Journal yesterday had an article entitled “Hedges Clip Gas Producer’s Earnings,” wherein the journalist took Chesapeake Energy, Clayton Williams Energy, Devon Energy, Pioneer Natural Resources and a few other smaller cap energy companies to task for their losses they’d suffered on their hedging operations.

Several of these are clients of TGL, and most notably Chesapeake Energy, and we thought the tone of the article was patently ill-advised and grossly wrong. The article made it appear that the hedging operations of these energy companies were speculative in nature, and that they would have done better for their shareholders had they chosen not to hedge, which in almost all instances means having taken short positions in either the Brent, or WTI crude futures or perhaps in nat-gas futures. We suspect too that the article was prepared prior to the massive plunge in crude oil prices last week that suddenly turned these supposedly ill-conceived hedge programs into much more profitable once instead.

Hedging is given a bad name by articles such as his. WE suspect that many of the hedges were put into place when the companies in question borrowed large sums of money to undertake oil exploration programs. With costs high but with prices higher still, wise management acted to sell production for months or years forward, thus protecting the borrowing programs from going from ones that are profitable when begun to ones that might become massively un-profitable when half way through if crude oil prices fell. As the CFO of Pioneer Natural Resources said, defending his company’s decision to hedge, “The hedging program in place allowed Pioneer to plan for drilling activity and make sure we can achieve our cash flow goals.”

That is precisely what good, sharp businessmen and women are supposed to do: play for business activities that allow them to achieve their cash flow and earning’s goals. To do otherwise is rank speculation and that is not the business they are supposed to be in. They are in the business of finding and distributing energy. If their shareholders wished management to speculate upon the direction of crude oil prices, would it not have been cheaper to shutter in all drilling activities, fire all employees, cancel all drilling rig leases, lease a quote machine or two and begin a program of organized gambling. Then, we supposed, the Wall Street Journal would have been satisfied.”

Article courtesy of Dealbreaker

Microsoft (MSFT) announced a short while ago that it will pay $8.5 billion in cash to purchase Skype, the Internet calling firm that was bought by eBay (EBAY) in 2005 and spun out in a leveraged buyout in 2009.

The deal is a confirmation of rumors that circulated yesterday on GigaOm, and then were picked up by The Wall Street Journal later in the evening. And it appears that DealBook was right on the money with their $8.5 billion prediction.

Microsoft this morning said Skype’s technology will advance the use of real-time video and voice communications for both consumers and corporations.

Microsoft CEO Steve Ballmer said that Skype “is a phenomenal service that is loved by millions of people around the world” and that “together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Ballmer will hold a press conference on the deal at 8 am, Pacific/11 am, Eastern. You can tune into it live here.

Microsoft shares are currently down 46 cents, or 1.8%, at $25.39 in early trading. Shares of eBay, which stands to reap some of that windfall for its remaining 30% stake in Skype, is up $1.38, or 4%, at $34.50.

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The Microsoft (MSFT) -for-Skype rumor is gaining ground.

GigaOm’s Om Malik earlier today offered a recap of rumors that “have been swirling around Skype” for a week now, with Reuters having written that Google (GOOG) and Facebook were looking for a deal with the Internet calling firm, or maybe looking to buy it. Malik wrote that Microsoft “has entered the mix.”

And tonight, The Wall Street Journal’s Anupreeta Das and Nick Wingfield are writing that Microsoft is “close to a deal to buy Internet phone company Skype Technologies SA for more than $7 billion,” citing anonymous sources.

Negotiations have been “wrapping up” this evening, they write.

eBay (EBAY), which bought Skype for $2.6 billion in October of 2005,  later sold the company in November of 2005 for $1.9 billion in cash, for a net gain of $1.4 billion, and a 30% stake in Skype to private equity shop Silver Lake, the Canada Pension Plan Investment Board, and venture firm Andreessen Horowitz in a leveraged buyout.

eBay listed its 30% stake at $620 million in last year’s 10-K filing, implying a value of roughly $2 billion for Skype.

Obviously, then, a Microsoft bid of this size would represent not just a premium t0 recent valuation, but multiples of the 2009 buyout, if it happens.

Some people thought eBay was crazy when they paid $2.6 billion in 2005, and there were also stories from Silicon Valley that some Skype backers at the time thought they should have asked for much more.

Microsoft ended the fiscal Q3 in March with $50 billion of cash, cash equivalents and short-term investments, and long-term debt of $12 billion.

Remember that bidding for Skype has been a spectator sport for some time. Back in August of last year, TechCrunch reported Cisco Systems (CSCO) was interested, which was then refuted by sources, Eric reported the next day.

Malik himself proposed back in September that Facebook should buy the company, and that it might have to pay $7 billion to $7.5 billion.

Remember, too, that Skype filed for a $100 million public offering last August, led by Goldman Sachs, JP Morgan, and Morgan Stanley, which has since been amended multiple times. The latest version, filed last month, lists $860 million in revenue for all of 2010. That would represent 20% revenue growth from the $719 million the company reported in 2009.

Effectively, then, Microsoft would be paying on the order of seven or so times trailing revenue. Skype had a pre-tax loss of $57 million in 2010, according to the filing.

The prospectus from April also records $690 million in long-term debt that was racked up to facilitate the leveraged buyout in 2009, against $142.5 million in cash and equivalents.

Microsoft shares ended the day down 4 cents at $25.83.

Update: All Things D’s Kara Swisher reports tonight sources tell her the deal is done and will be announced early in the morning. Skype is to be integrated with Microsoft’s Windows Live service. Swisher says reports of Facebook’s interest in Skype were “overblown,” according to her sources.

And Andrew Ross Sorkin and Steve Lohr of The New York Times’s DealBook report sources are saying the price tag is $8.5 billion, including the assumption of the debt.

Article courtesy of Tech Trader Daily

In case you missed it, the Financial Times’s Matthew Garrahan, Adam Thomson, and Joe Leahy write in this morning’s edition about Netflix (NFLX) is close to signing a deal with three of the biggest broadcasters in Latin America to begin streaming programming in Argentina, Brazil, Chile, and Mexico, citing multiple anonymous sources.

Netflix’s overseas expansion beyond its U.S. and Canada audience is seen as an important route for expanding its total subscriber count in coming years.

The broadcasters are Mexico’s Grupo Televisa and TV Azteca, and Brazil’s Globo.

And in case you missed this, The Wall Street Journal’s Jessica Vascellaro, Lauren Schuker, and Sam Schechner this morning report that a gaggle of big media companies are turning in their attitude toward Netflix: Time Warner (TWX) is among those companies that seem to be in a rush to tout their deals with the company.

Note, too, the Breaking Views piece by Jeffrey Goldfarb and Reynolds Holding, in the NY Times business section today that talks about how Netflix lifted its limit on stock options employees can take as a portion of their pay, and how the company offers the options on a monthly, rather than an annual, basis.

Netflix shares today are up $5.59, or 2.4%, at $235.06.

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As ‘Locationgate’ continues to unfold, the Wall Street Journal is reporting today that Apple‘s (AAPL) iPhone stores users’ locations even when the service is turned off.

The Journal’s tests found that the information seems to be collected via cellphone towers and Wi-Fi access points near a user’s phone, but doesn’t  appear to be transmitted back to Apple.

However,  the fact remains that the iPhone is collecting and storing location data even when users have actively chosen to turn off location services, highlighting how little control they have. This comes after last week’s revelations that Apple keeps a database of where users bring their iPhones, and that operating systems by both Apple and Google (GOOG) transmit location information back to the companies. Some members have Congress have also been calling for an investigation into the matter.

The Journal describes the tests as follows:

Reporters disabled location services (which are on by default) and immediately recorded the data that had initially been gathered by the phone. The Journal then carried the phone to new locations and observed the data. Over the span of several hours as the phone was moved, it continued to collect location data from new places.

These data included coordinates and time stamps; however, the coordinates were not from the exact locations that the phone traveled, and some of them were several miles away. The phone also didn’t indicate how much time was spent in a given location. Other technology watchers on blogs and message boards online have recorded similar findings.

Article courtesy of Tech Trader Daily

This is the other shoe dropping.

Following a revelation earlier this week by programmers that Apple’s (AAPL) iPhone maintains a database on the device of the locations an individual has traveled with the phone, The Wall Street Journal’s Julia Angwin and Jennifer Valentino-Devries write today that both Google’s (GOOG) and Apple’s operating systems are transmitting some location data back to the companies.

“According to new research by security analyst Samy Kamkar, an HTC Android phone collected its location every few seconds and transmitted the data to Google at least several times an hour,” the authors write.

(Kamkar, a convicted computer felon, maintains a Web site here. The Journal used a consultant to test Kamkar’s research, and apparently he verified the findings about the Android OS.)

As for Apple, the authors cite a letter the company sent last year to representatives Ed Markey, Democrat of Massachusetts, and Joe Barton, Republican from Texas, saying it, “‘intermittently’ collects location data, including GPS coordinates, of many iPhone users and nearby Wi-Fi networks and transmits that data to itself every 12 hours.”

As the authors note, there are some specific limitations. For example, Apple’s data on locations transmitted back to its data centers is not tied to a phone’s unique identification code. Google’s process, Kamkar’s work suggests, includes data gathering and transmittal that is tied to the phone and that proceeds even when the phone’s apps are not explicitly requesting network location.

Article courtesy of Tech Trader Daily

Today was the day Research in Motion’s (RIMM) PlayBook tablet computer went on sale, though it was a bit of an under-the-radar affair, to judge from the product placement at some retail outlets I visited in New York.

The good news: some stores seem to be moving units, judging from feedback I got.

I visited a couple of Best Buy stores and a couple of Staples stores in midtown Manhattan, hardly a representative sampling, I know. But what I observed was interesting. Product placement was disappointing in all four cases.

At Best Buy, there was no display, and no signs that I saw. The PlayBook was held by an employee behind the counter, and one had to request to see it. Fortunately, the PlayBook in both stores I went to was running on WiFi and so one was able to test out the Web browsing, etc. Needless to say, with signs and displays and end-caps for everything electronic under the sun, this hush-hush approach was not the best use of Best Buy floor space for RIM. Hopefully, things will get better.

At one of the stores, I was told that the PlayBook was sold out, unless I had pre-ordered. Asked how many units had been sold, the clerk told me, “We had a lot of them.”

Staples had a bit of the opposite problem: their store windows are dressed up with big signs screaming “tablets are here.”  Which is not the best way to get the PlayBook above the fray. In one store I visited, the PlayBook had no network connection, which not only meant it was not much fun to play with, but it also conveyed the impression that some apps were slow or generally unresponsive. I have a feeling that was a result of the device searching for the network connection, not a result of the sluggishness of the device itself.

In other Staples store in midtown, the PlayBook was in the middle of an OS update, downloading code. Thus, there was no using the machine. Perhaps in the middle of the afternoon is not the best time for Staples staff to be updating the machine.

All in all, much to be improved with the PlayBook’s in-store experience. I should point out that it’s not clear what immediate impact this kind of soft debut will have. The Wall Street Journal’s Satish Sarangaranjan and Melissa Korn this afternoon write that RIM said online pre-orders have been “firm.”

Still, the PlayBook has some nices aspects to it, such as a smoothly functioning user interface. It deserved a better coming-out-party, I think.

RIM shares ended the day down $1.61, or 3%, at $53.22.

Article courtesy of Tech Trader Daily