Among firms that had IPOs recently, the short interest in Zynga (NASDAQ: ZNGA) rose 35% to 56.6 million. Shares sold short in Groupon (NASDAQ: GRPN) rose 19% to 20.7 million. Both companies have been under attack because many investors believe that they cannot sustain sales in a market in which the number of competitors is multiplying quickly.

Among Web 1.0 firms, the short interest in Yahoo! (NASDAQ: YHOO) was up 23% to 25.6 million. Although the firm has been able to make progress with its Asian assets, its core portal business is in trouble, and it recently replaced another CEO. Shares short in eBay (NASDAQ: EBAY) rose 19% to 16.6 million.

Among other tech stocks, the short interest in Microsoft (NASDAQ: MSFT), which continues to struggle in the critical mobile industry, rose 25% to 87 million. Shares sold short in badly wounded Research In Motion (NASDAQ: RIMM) rose 18% to 53.4 million. The short interest in Oracle (NASDAQ: ORCL) rose 8% to 35.4 million shares.

Other companies with weak prospects hit by short sellers included Chesapeake Energy (NYSE: CHK); shares sold short rose 27% to 85.2 million. There are questions about the CEO’s practice of investing individually in some of the firm’s drilling projects. Shares short in Sprint-Nextel (NYSE: S) rose 20% to 116.7 million. The third-largest wireless company continues to lose ground to AT&T (NYSE: T) and Verizon Wireless.

Short interest in major banks also rose as worries about Europe’s finances and new regulations pushed share prices down. Shares sold short in Bank of America (NYSE: BAC) rose 6% to 150.7 million. The short interest in Citigroup (NYSE: C) rose 16% to 35.5 million. Shares sold short in Wells Fargo (NYSE: WFC) moved higher by 11% to 36 million.

Douglas A. McIntyre

The top mobile phone advertising platform was the iPhone, with 15% of the market, followed by RIM’s Blackberry Curve with 4.4% and Motorola’s Droid Razr with 4%. When combined with advertising served to tablets, Apple grabbed about 28% of impressions, followed by Samsung with 18%.

As a group, smartphones took 73% of all advertising in the first quarter, up from 62% in the same period a year ago. Tablets, however, took 20% of impressions, up from 15% last year, and now claim nearly 3x the ad impressions for feature phones.

The data comes from a survey by Millennial Media Inc. (NYSE: MM), a mobile ad network that competes with Apple’s iAds and Google’s AdMob.

Millennial also note that of the top 10 devices that display ads, 3 were tablets. A year ago only Apple’s iPad made the top 20. The two additions this year were Samsung’s Galaxy Tab and Amazon’s Kindle Fire.

As tablets attract more buyers, it’s reasonable to expect that their share of the ad market will grow. Recent research from Nielsen indicates that tablets get 24% of all Worldwide Web ad clicks, compared with just 11% for phones. Tablets are more like desktop and laptop computers and users may click on ads because of the more familiar size of the screen. The small screens on smartphones are not as easy to use to find things quickly — and that’s the appeal of smartphones and smartphone apps — to find exactly what a user wants with the least amount of fuss.

This is good news for Apple, of course, and not-so-good news for Google, which pays a hefty price in traffic acquisition costs to maintain its position as the default search engine on OEM smartphones, including iPhones. By one estimate Apple gets 50%-60% of the revenue from a Google search on iOS, whether from an iPhone or an iPad. Google probably does not have to part with quite as much revenue for devices from other makers, but a cut of about 40% would match Google’s reported traffic acquisition costs. Google needs to find a way to hold onto more of its search revenue because its mobile ad network simply can’t make up the lost cash flow.

Paul Ausick

Hewlett-Packard (NYSE: HPQ) posts better-than-expected earnings and says it will fire 27,000 people. (Reuters)

Oracle (NASDAQ: ORCL) loses an important ruling in an intellectual property suit against Google (NASDAQ: GOOG). (Reuters)

Shareholders sue Facebook (NASDAQ: FB) because of trouble with its IPO. (Reuters)

Facebook may move to the NYSE (NYSE: NYX). (Reuters)

Some large investors receive warnings from analysts that projections of Facebook’s earnings have come down. (WSJ)

Chesapeake Energy (NYSE: CHK) increases drilling on the Utica Shale in Ohio. (WSJ)

Sony (NYSE: SNE) will sell part of its LCD business to Sharp. (WSJ)

The head of sales at Research In Motion (NASDAQ: RIMM) departs. (WSJ)

Yields on German bonds fall to all-time lows as capital moves to safety. (WSJ)

General Electric (NYSE: GE) says its industrial profit margin will rise in 2013. (WSJ)

Oil falls below $90 for the first time since October. (WSJ)

Royal Dutch Shell (NYSE: RDS-A) will begin to drill in far north areas of Alaska. (NYT)

Martha Stewart will once again become chairperson of Martha Stewart Living Omnimedia (NYSE: MSO). (NYT)

A deal for financial coordination among EU nations will be put off until a June meeting. (FT)

Shale gas helps the U.S. lower emissions. (FT)

Large companies turn over CEOs less than in the downturn, according to Booz & Company. (FT)

BMW will triple its output in China. (Bloomberg)

Detroit turns off street lights to save money. (Bloomberg)

Douglas A.McIntyre

The U.S. allows China to buy treasuries directly without banker assistance. (Reuters)

MF Global paid Jon Corzine $8 million in the year before it collapsed. (Reuters)

The new BrandZ annual study of brand values puts Apple (NASDAQ: AAPL) in the top position, followed by McDonald’s (NYSE: MCD), Coca-Cola (NYSE: KO), IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG). (Reuters)

Trading losses at JP Morgan (NYSE: JPM) help competitors make money. (Reuters)

Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and Cablevision (NYSE: CVC) will share Wi-Fi systems to give customers more access to wireless broadband. (WSJ)

Many traders blame Morgan Stanley for overpricing Facebook shares. (WSJ)

France and Germany remain in a battle over the future of austerity in the region. (WSJ)

Facebook’s largest hurdle with investors remains its mobile strategy. (WSJ)

The European Union gives Google little time to answer charges about its business practices, which include privacy matters. (WSJ)

Formula One Group will go public on the Singapore Stock Exchange to raise $2.5 billion. (WSJ)

Zynga (NASDAQ: ZNGA) shares are hurt by the drop in Facebook’s stock. (WSJ)

JP Morgan will kill is share buybacks because of trading losses. (NYT)

Eastman Kodak loses its patent case against Apple and Research In Motion (NASDAQ: RIMM). (NYT)

France will press its neighbors to create eurozone-wide bonds. (FT)

Douglas A. McIntyre

Samsung Electronics (OTC: SSNLF.PK) and LG Electronics both paid Kodak nearly $1 billion to gain rights to the discredited patent. Kodak claimed that Apple owed it more than $1 billion for infringing.

The patent was one of about 1,100 included in Kodak’s digital capture technology patent portfolio. That’s about 10% of the company’s total patent portfolio that has been valued as high as $3 billion.

Today’s ruling calls into question the value of Kodak’s entire patent portfolio. Many of the patents are fine, of course, but the ones that really matter are all going to be litigated and a buyer’s anticipated profits from the portfolio just dropped. And probably by a lot. Zero may not be too low.

Paul Ausick

Ackman had pushed for replacing Green with Hunter Harrison, former CEO of Canadian National Railway Co. (NYSE: CNI), but following the coup Ackman now said not to expect a coronation, “We’re going to do a proper job, we’re going to meet all the candidates and do it the right way.”

Canadian Pacific’s problems, at least according to Ackman, are due to high operating costs and he wants to reduce those costs. Ackman’s stated goal is to lower CP’s operating ratio — that is cost as a percentage of revenue — from around 80% to 66%. That would match the operating ratio at Canadian National, Harrison’s former company. Most of the credit for CN’s success, however, is attributed to Harrison’s predecessor.

CP’s main problem is that it operates mainly in western Canada in a nasty climate with difficult topography. The company hauls mainly commodity minerals and is captive to swings in the market for those minerals. Lowering costs won’t be easy once the workforce is trimmed.

CP’s ability to compete with the likes of Union Pacific Corp. (NYSE: UNP), CSX Corp. (NYSE: CSX), Burlington Northern Santa Fe (BNSF), owned by Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A), and Norfolk Southern Corp. (NYSE: NSC) is dubious, given that CP is much smaller than any of these and that the only likely merger possibility is Kansas City Southern (NYSE: KSU). A potential merger between Canadian National and BNSF was squashed by regulators in 1999, so a tie-up with one of the larger railroads is unlikely.

What is likely is that Ackman has shaken up sleepy Canadian companies and shareholders. This was Canada’s first big, public battle over corporate direction and many observers believe that it’s just the beginning.

Who could be next? A good bet might by phone maker Research in Motion Ltd. (NASDAQ: RIMM) whose recent struggles are well documented.

CP did not get much of a share price boost yesterday, closing at $75.07 in a 52-week range of $44.74-$79.91. The stock is inactive in pre-market trading this morning.

Paul Ausick

Samsung Electronics (OTC: SSNLF.PK) led all vendors with 86.6 million units sold, followed by Nokia Corp. (NYSE: NOK) with 81.2 million units sold, and Apple Inc. (NASDAQ: AAPL) with 33.1 million units sold. Research in Motion Ltd. (NASDAQ: RIMM) sold 9.9 million units and Motorola Mobility Holdings Co. (NYSE: MMI) sold 8.4 million units.

Samsung grew its handset market share from 16.1% to 20.7% year-over-year. Apple’s share also grew, from 3.9% to 7.9%, while Nokia’s share fell from 25.1% to 19.8%. The only other vendor to increase share was ZTE Corp., a Chinese maker of low-cost handsets.

By software platform, the Android operating system from Google Inc. (NASDAQ: GOOG) grabbed 56.1% of sales, up from 36.4% in the first quarter of 2011. Apple’s iOS was second in platform shipments, with a 22.9% of the market compared with 16.9% last year. The big losers were Nokia’s Symbian OS, down from 27.7% a year ago to 8.6% this year, and RIM, down from 13% a year ago to 6.9% this year. Microsoft Corp.’s (NASDAQ: MSFT) share also fell, from 2.6% a year ago to 1.9% this year.

According to Gartner:

All vendors were impacted at different levels; however, white-box vendors seem to have suffered the most. While tier one players such as Nokia were negatively impacted on sell-in numbers (sold into retail), white-box vendors were unable to adjust production and were left with a build-up in inventory by the end of the quarter. Gartner expects some of this volume to be sold during the next couple of quarters, because the channel is likely to lower the prices to dispose of the stock.

The lower results in the first quarter of 2012 have led us to be cautious about sales for the remainder of the year. The continued roll-out of third generation (3G)-based smartphones by local and regional manufacturers such as Huawei, ZTE, Lenovo, Yulong and TCL Communication should help spur demand in China. In addition, the arrival of new products in mature markets based on new versions of the Android and Windows Phone operating systems (OSs), and the launch of the Apple iPhone 5 will help drive a stronger second half in Western Europe and North America. However, as we are starting to update our market forecast we feel a downward adjustment to our 2012 figures, in the range of 20 million units, is unavoidable.

Now a decline of 20 million units over the course of a year is not much when total sales are expected to be north of 1.5 billion units. Samsung and Apple took more than 49.3% of total smartphone sales of 144.4 million units in the first quarter. The smartphone market has become a two-horse race, especially at the top-end of the market. Whether or not Nokia/Microsoft want to or can get into that race remains to be seen.

The open race is at the low end of the market and that’s where RIM and Motorola will have to fight it out with the low-cost makers like ZTE. Nokia/Microsoft would probably prefer not to play down here. Neither do RIM or Motorola, but that’s where the race is still undecided.

The Gartner press release is available here.

Paul Ausick

Nokia has been losing market share due to the explosion of smartphones.  Whether this is fair or not after the company recently went after a new Windows phone, the company is considered to be a large seller of cheaper phones in emerging markets.  What is so ironic about this story is that Nokia was just recently shown to be one of the top brands in Asia. Apparently that isn’t going to cut it.

The competition from Apple Inc. (NASDAQ: AAPL) for the iPhone and also from Samsung and Google Inc. (NASDAQ: GOOG) for Droid phones has been too steep.  Now even the emerging markets are starting to explode in smartphone use.  Even Research-in-Motion Ltd. (NASDAQ: RIMM) is not quite as in bad of shape for now as Nokia.

Ask yourself a simple question: How many do you know that have a Nokia phone?  Maybe the only hope is that Nokia can somehow get every person in the world who does not have a phone yet to buy one of their lower-end models in emerging market expansion. Or maybe an alternative hope is that suddenly no one can afford smartphones…

The downgrade already expects things to get worse.  Here is the dire warning in the Societe-Generale downgrade… if the company keeps losing share with sales declining and keeps its restructuring costs so high, then it risks burning through most of its available cash.  It ultimately even sets the conditions that it brings Nokia’s survival into question, although that is a scenario outside of the base case.  That is not exactly a call that Nokia is going bankrupt, but it sure feels like a dance around that notion without causing undue offense and pressure merely by the mention of such a possibility.

It is important to remember that billions and billions of dollars have been lost here.  Yahoo! Finance still lists Nokia as an $11+ billion market value and that is with shares at a 52-week low (and decade-plus low) of $3.03 today.  The prior 52-week range was $3.12 to $8.73 and the ADR was worth $15 in mid-2010 and over $25 back in 2008.

This downgrade did not exactly call for bankruptcy.  It just sets yet one more call against Nokia’s future.

JON C. OGG

Adtran Inc. (NASDAQ: ADTN) Reiterated Buy and $39 target at Argus.

Apple Inc. (NASDAQ: AAPL) Maintained Outperform but cut estimates at Credit Suisse (full details).

Arena Pharmaceuticals (NASDAQ: ARNA) Raised to Buy at Jefferies; Raised to Outperform at Leerink Swann.

AT&T, Inc. (NYSE: T) Raised to Outperform at Credit Suisse.

Beam Spirits Inc. (NYSE: BEAM) Maintained Hold at Argus.

Bed Bath & Beyond (NASDAQ: BBBY) Raised to Outperform at Credit Suisse.

Best Buy (NYSE: BBY) Cut to Neutral with $20 target at Credit Suisse.

Buffalo Wild Wings (NASDAQ: BWLD) Started as Outperform at Wells Fargo.

Chevron Corp. (NYSE: CVX) Reiterated Buy with $130 target at Argus.

Heckmann Corporation (NYSE: HEK) Started as Outperform with $5 target at Credit Suisse.

J.P. Morgan Chase & Co. (NYSE: JPM) Maintained Outperform but cut estimates at Credit Suisse; Cut to Hold at Stifel Nicolaus; Cut to Market Perform at FBR.

Myriad Genetics Inc. (NASDAQ: MYGN) Started as Neutral at BofA/ML.

ProAssurance Corp. (NYSE: PRA) named Bull of the Day at Zacks.

RadioShack Corp. (NYSE: RSH) named Bear of the Day at Zacks.

Rexnord Corporation (NYSE: RXN) Started as Neutral at Credit Suisse.

Research In Motion Limited (NASDAQ: RIMM) Maintained Neutral and cut estimates at Credit Suisse.

Sun Life Financial Inc. (NYSE: SLF) Raised to Outperform at Credit Suisse.

Texas Roadhouse (NASDAQ: TXRH) Started as Market Perform at Wells Fargo.

Verizon Communications, Inc. (NYSE: VZ) Raised to Outperform at Credit Suisse.

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JON C. OGG

A review of the biggest losers demonstrates how little consumers care about prior successes. Although these companies were the industry darlings once, today consumers may not even remember their names.

Companies such as Nintendo, Research In Motion, Sony and Nokia dominated their markets for a number of years and, in many cases, had few to no serious competitors. These companies often rose to the top because of major breakthrough products, such as the Nintendo Wii, RIM’s BlackBerry and Sony’s Walkman.

But the companies on this list have not managed to adequately follow up these successes with new products and now are losing ground to competitors. Sharp has lost money due to competition from companies like Samsung that have stronger brands and can undercut its prices on TV. Nokia, which continues to do well in the low-end cell phone market, is losing money because it has been unable to make a significant break into the growing smartphone market.

24/7 Wall St. has identified eight of the most popular tech brands that are losing money. To demonstrate these companies’ waning popularity, 24/7 reviewed financial data from their financial statements, as well as data from a number of major research firms.

These are the eight great tech brands losing money.

1. RIM

Research In Motion (NASDAQ: RIMM) was, for a time, a leader in the smartphone market. Its BlackBerry phones helped pioneer the industry. The company’s popularity has since waned and it has begun to lose money. In the fourth quarter of fiscal 2012, RIM had a net loss of $125 million, the result of goodwill charges and “an inventory provision taken primarily on certain BlackBerry7 products.” Revenue was down 24% compared to the year prior. According to Comscore, RIM’s share of the U.S. market for smartphone subscribers dropped from 16% last December to 12.3% in March. Meanwhile, the share of smartphones using Google’s (NASDAQ: GOOG) Android rose from 47.3% to 51% over the same period. The company’s BlackBerry 10 handsets, which are being released later this year, may be RIM’s last chance for relevance.

2. Sharp

Sharp reported a record annual loss of $4.67 billion this past April. The company also announced that it expects to continue to lose money in the current fiscal year. Sharp’s losses are primarily due to falling prices and declining sales of its LCD televisions. The Japanese company has been struggling to compete with South Korean manufacturers. In addition, the company spent $1.5 billion in restructuring costs. In March, Sharp sold a 46% stake in its largest plant to Taiwanese rival Hon Hai to soften losses at its television business.

3. EA

Electronic Arts (NASDAQ: EA) reported a net loss of $205 million for the fiscal third quarter ending December 31, 2011, despite generating $1.06 billion in net revenue over the same period. Two of the company’s major titles — FIFA 12 and Battlefield 3 — have each sold more than 10 million copies, a particularly large quantity for games. Madden 12 has sold nearly 5 million. Many experts believe that the company’s launch of The Sims Social — meant as a competitor to Zynga (NASDAQ: ZNGA) products — has not done well. This was viewed as a gamble on EA’s part, as the company has spent hundreds of millions of dollars trying to break into the social games space. It is not the first time for EA to be in the red. The company had a net loss of $322 million in the same quarter the year before.

4. Sony

Sony (NYSE: SNE) was a world leader in a variety of electronic products only a few years ago. As recently as November 2011, the company cut its sales forecast for TVs, cameras and DVD players. The company’s financial situation has only worsened since then. In April 2012, Sony decreased its earnings outlook for the fourth time in less than a year, warning of a potential $6.4 billion net loss in the last fiscal year. The Wall Street Journal said the loss would be “the biggest-ever in the electronics conglomerate’s 65-year history.” Sony has been dealing with ongoing losses in its television segment. In its consumer electronics arm, the company has been struggling to deal with competition from companies like Apple (NASDAQ: AAPL) and Samsung. Sony also has lost its standing in the game console market, which it once owned with the PS2, and in the portable music device market, which it owned with the Walkman.

5. Nintendo

Nintendo was the number one video game console manufacturer in the world thanks to its Wii. In order to better compete, Microsoft (NASDAQ: MSFT) and Sony slashed prices on their Xbox 360 and PS3 products. Nintendo, as a result, was forced to drop the prices of both its Wii and portable player DS. In April 2012, the company posted a total loss of $461.2 million for the 2011 fiscal year. All three companies also face the growing competition posed by smartphone-based gaming.

6. Nokia

Nokia (NYSE: NOK) has long been the world’s largest handset manufacturer, but it lost that position to Samsung in the first quarter of the year. Its past success was due, in large part, to the company’s low-end cell phone models, which are particularly popular in developing countries. When it came to smartphones, however, Nokia has not kept up. The market continues to be dominated by Samsung and Apple. Nokia’s inability to break into the more profitable smartphone arena has been apparent in the company’s profit and loss statements. In April 2012, the company announced a quarterly net loss of $1.2 billion, blaming “greater than expected competitive challenges.” In an attempt to turn itself around, Nokia has set a joint venture with Microsoft to distribute Windows mobile on its smartphones in exchange for financial and marketing support.

7. Barnes & Noble

Barnes & Noble (NYSE: BKS) has invested increasing amounts in its Nook e-book reader. But intense competition from other tablet and e-reader companies, including Apple and Amazon.com (NASDAQ: AMZN), has kept the company in the red. For the 39 weeks that ended January 28, 2012, Barnes & Noble lost more than $11 million. The company blamed the increasing losses on continued investments “in its rapidly growing Nook business, including advertising costs and personnel.” To help it with the Nook development costs, Barnes & Noble has also formed an alliance with Microsoft. The software company has made an investment in the book company’s e-book and e-reader businesses in exchange for the creation of Nook models that run the Windows OS.

8. Acer

Acer’s business plan used to rely on the netbook, the cheap, portable and underpowered laptop. In the past two years, however, netbook sales have been disrupted by the surging tablet market, as well as the growing popularity of smartphones. Dropping the price did little to encourage demand. The company reported a massive annual loss of $212 million in 2011. Now the company is focusing on the Utlrabook, Intel’s (NASDAQ: INTC) laptop and effectively the next generation of netbook. It appears the company has not learned its lesson. According to The Verge, Acer Global President Jianren Weng predicts that PC Ultrabooks will drop to $499 in 2013 to compete with Apple’s iPad. Unfortunately, that is several hundred dollars less than the company needs to make money.

Charles B. Stockdale