If you will recall, the first Microsoft deal for $300 million took Barnes & Noble much higher. B&N shares screamed higher to about $26 for a peak the last time around, with shares peaking around $23 last week on the rumored deal. More reports have surfaced which question or even refute the rumored transaction last week.

The big risk here by our take is that Microsoft might have been risking too much credibility. Calls are out every week to call for the ouster of Steve Ballmer as CEO. Bill Gates is all but history as far as his promotion of the company now. The software giant took a huge $6.2 billion non-cash accounting writedown on the aQuantive just last year.

The dollar amount matters little, because the company has billions upon billions of dollars to play with. What mattered at the time was that Microsoft said its expectations for future growth and profitability were lower than previous estimates and it admitted that the aQuantive acquisition did not accelerate growth to the degree anticipated.

If online media and advertising wasn’t enough, how could reproducing paper books on a device be a huge help for Microsoft? The Nook already faces massive challenges from Amazon.com inc. (NASDAQ: AMZN) via the Kindle and Apple Inc. (NASDAQ: AAPL) from the iPad. Others are coming on strong into the tablet market as well.

Maybe Microsoft just does not want another egg to be thrown in its face. Shares are of Barnes & Noble are down 12.6% at $20.40 in active trading. Microsoft shares are up 0.25% at $32.78 so far this Monday.

Reuters said about the workforce at one Apple supplier:

Pegatron Corp, an assembler of Apple Inc’s iPhone and iPad, said it would increase its number of workers in China by up to 40 percent in the second half of the year, fuelling market speculation of a new cheaper iPhone.
Pegatron currently employs 100,000 workers.

Suppliers have told Reuters that Apple is developing a cheaper model of the phone, broadening its sales base to lower-income buyers in growth markets such as China and India.

A supplier source in Japan said small-scale production of the display panel for the model would begin in May, ramping up to mass production in June.

Apple is widely expected to launch the cheaper version of the iPhone in the third quarter.

Bloomberg TV has just reported that Doug McMillon and Bill Simon have been identified by the board of directors. Simon is the CEO of Walmart U.S. and Simon is the head of Walmart International.

If you have been a reader of 24/7 Wall St. for very long, you know that CEO change is not a new thing. We called for Lee Scott to be replaced after years of lagging performance. That came about shortly after our call. Now there may be new change coming to Walmart.

Mike Duke served as vice chairman of the company from 2005 to 2009, and his responsibility was Walmart International at the time. Unfortunately, that puts him in the continued hot-seat about the bribery and corruption allegations in Mexico. He is currently listed as being 63 years old.

Walmart was just featured in our own list showing the most popular stores in America by foot traffic. It is hard to know if today’s news is something that is imminent or if it is merely a backup plan in case the probes around Walmart Mexico (or elsewhere) widen out again.

As we usually warn readers, we would consider this a rumor until we get a confirmation via press release or in an SEC Filing.

Of course, investors could be gun-shy after the collapses of the share prices of Facebook Inc. (NASDAQ: FB), Groupon Inc. (NASDAQ: GRPN) and Zynga Inc. (NASDAQ: ZNGA). Twitter has not demonstrated that it can bring in a critical mass of advertising, at least not enough for it to be considered a large media company. Analysts estimate that the company could be worth $10 billion currently, which may be much to pricey for Wall Street.

The New York Times says of the new Twitter corporate development chief:

The company has hired Cynthia Gaylor, a managing director at Morgan Stanley, to be its head of corporate development, Alexander Macgillivray, Twitter’s chief lawyer, said in a tweet on Thursday.

Adding:

Over her career, Ms. Gaylor has worked on technology deals including the sale of Zappos to Amazon.com, according to her profile on LinkedIn. More recently, she has advised on financing transactions like initial public offerings.

Among her clients are Facebook, Zynga, Netflix and LinkedIn, the LinkedIn profile says. She joined Morgan Stanley in 2006 after working at Hambrecht & Quist, which became part of JPMorgan Chase.

CNBC says about the Berkshire Hathaway annual meeting:

Warren Buffett may be on safari for major acquisitions, which he likes to call elephants, but shareholders may wonder if his Berkshire Hathaway Inc has become the biggest elephant in the room.

Berkshire has grown to look more and more like corporate America, as Buffett expands outside its core insurance business into such areas as energy, industrial products, newspapers, and in February ketchup, when he teamed up with Brazil’s 3G Capital investment firm to buy H.J. Heinz Co for $23.2 billion.

And:

Some investors will also ask how long a man of Buffett’s age, even one who recently beat prostate cancer, can remain at the helm of the company he has led since 1965.

“There is nothing the board can do to halt the aging of the CEO, but it has no higher priority than to prepare for succession,” said Thomas Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, which invests 11 percent of its more than $6 billion of assets in Berkshire.

China reported that its official purchasing managers’ index fell to 50.6 in April from 50.9 in March. The drop seems small; a figure above 50 signals expansion. However, the slide was enough to cause concern among many economists who believe it is a sign that China’s gross domestic product (GDP) could drop below 8%.

Many of those people who have written that they believe China’s numbers are small operate on the fringe of the world of economists, which causes skepticism about their views. Larry McDonald, who publishes a newsletter, wrote an essay titled “Is Chinese GDP the New Libor?” In it he claimed that some of the data issued by the government of the People’s Republic is contradicted by other data the government issues. Short seller Jim Chanos agrees, and he thinks that China misrepresents its inflation numbers to make it appear that costs are not rising quickly.

More-mainstream experts have expressed worry about China’s numbers as well, including UBS, Goldman Sachs and Standard Chartered.

Zerohedge reports on whether China manipulates its economic data:

After China’s statistics bureau reported third-quarter GDP in October, Standard Chartered Plc analysts said the 7.4 percent increase was “too good to be true” when compared with the slowdown in electricity production and the readings of a manufacturing index, while London-based Capital Economics Ltd. said its own analysis indicated expansion of about 6.5 percent.

And:

“It is possible that local governments may have tried to boost exports data by either making round trips in special trade zones” or by exporting “earlier than otherwise in an attempt to improve the annual exports data,” Goldman Sachs’ Beijing-based economists Yu Song and Yin Zhang wrote the same day.

But why does it matter?

First is that the practice, if it actually goes on, undermines trust in any figures China puts out. Some of these are used by institutional investors to make bets on currencies and other financial instruments. Some U.S. companies set investment strategies for China based on what its government claims. It has been widely assumed that the Chinese middle-class consumer is active enough to support huge imports from overseas and the building of factories and stores.

The more important issue is whether China fundamentally lies about a broad range of issues, the information about which the government controls. These run from its claims that it has never launched a cyberattack on U.S. interests to financial and economic information it uses to support control of its currency — a point of friction between China and many of its trading partners.

Does China lie about its PMI? That should be the least of the worries of economists who track the numbers given out by the People’s Republic.

There have been rumors for years that a deal would be consummated. Verizon takes on a very large risk if it finally does make the purchase. The wireless service subscription business in the United State has become a zero-sum game, at least as far as absolute subscriber counts go. More than 300 million people have wireless service accounts, and that is at or above the level of the U.S. population.

The big four wireless companies — AT&T Inc. (NYSE: T), Sprint Nextel Corp. (NYSE: S) and T-Mobile, which will soon merge with MetroPCS Communications Inc. (NYSE: PCS) — continue to try to take market share from one another. Sprint is likely to step up its pursuit of customers because of a new investment from likely owner Softbank. Each of these companies has increased its fees for data used by customers, but competition has put price pressure on these initiatives.

Reuters said of Verizon’s bid for Vodafone’s stake:

The sources said Verizon was now ready to push aggressively for a deal. It hopes to start discussions with Vodafone soon for a friendly agreement but is prepared to take a bid public if the British company does not engage, one of the sources added.

“I don’t really see this as a surprise,” one of Vodafone’s 15 largest investors told Reuters, on condition of anonymity. “The talk about this deal has been quite intense recently. We knew that Verizon were definitely a keen buyer and that Vodafone were a keen seller.”

The chairman of the company’s compensation committee, James McNerney, CEO of Boeing Co. (NYSE: BA), was reported by Bloomberg to be unhappy with McDonald after P&G was forced to cut its forecast three times in a year. The irony of that is best left to another day.

P&G announced a layoff of 5,700 employees last year, as well as other cost cutting measures totalling some $10 billion by 2016 to help offset rising commodity costs. That has certainly helped the company’s bottom line, but it’s nothing more than a near-term fix.

McDonald may also get a shareholder challenge led by activist investor William Ackman of Pershing Square Capital Management. Ackman’s hedge fund owns about 1% of P&G’s stock, and while he’s currently busy with Herbalife Ltd. (NYSE: HLF) and J.C. Penney Co. Inc. (NYSE: JCP), if he smells blood in the water here, McDonald could face a tough opponent. Ackman probably thinks he waited too long for results from his hand-picked CEO for Penney’s and is not likely to make that mistake again.

When the notion of replacing McDonald came up last year, many thought that it was premature. After all he’d been at the head of P&G for only about three years and those were the toughest years for the U.S. economy since the Great Depression. But as the quarters roll along and P&G’s performance doesn’t improve, McDonald’s tenure in the corner office gets shakier.

Shares of P&G hit a bottom of around $45 in May of 2009 and have since climbed to an all-time high of more than $82. But growth was pretty flat for the two year to January of 2013, when they turned sharply higher as commodity prices fell and the company’s cost reduction program showed some results. Neither force, however, demonstrates much of a strategic vision.

P&G’s shares are down about 4.8% in mid-afternoon trading today, at $78.05 in a 52-week range of $59.07 to $82.54.

According to the Wall Street Journal:

Earlier this year, Microsoft asked suppliers in Asia to ship components for a potential watch-style device, the executives said. One executive said he met with Microsoft’s research and development team at the software company’s Redmond, Wash., headquarters. But it’s unclear whether Microsoft will opt to move ahead with the watch, they said.

Shares of Microsoft are so far down fractionally in premarket trading, at $28.55 in a 52-week range of $26.26 to $32.89.

A recent IDC report blamed a poor reaction to the operating system for a 14% drop in PC sales in the first quarter. The news dragged down the shares of PC manufacturers and chip providers. The Windows 8 case against Ballmer can be added to Microsoft’s late entry into search and its lack of success in the mobile markets.

The speculation gets married with more speculation about who would take Ballmer’s job. Much of the guessing centers around Microsoft chairman and founder Bill Gates. He left day-to-day responsibilities behind when he retired more than a decade ago. He currently spends much of his time giving away his fortune. However, Gates may feel that his legacy is at stake as Microsoft flounders. Wall St. would not accept many of the other alternatives because few people have the background to turn around the world’s largest software company. The best candidates, including Google Inc. (NASDAQ: GOOG) Chairman Eric Schmidt, are not going to leave their current positions.