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

DT lost $39 billion when federal officials killed a deal for AT&T (NYSE: T) to buy T-Mobile. The German company stepped away with a $4 billion break-up fee. That is not nearly enough to maintain and build the infrastructure T-Mobile needs to compete in new 4G technology. T-Mobile also has nothing close to the marketing money AT&T and Verizon Wireless have. Neither does T-Mobile have the Apple (NASDAQ: AAPL) iPhone — the greatest customer magnet in the industry.

DT has access to capital to pump billions of dollars into T-Mobile, but it will not. T-Mobile has only 35 million subscribers. Fourth place in the market is not attractive, especially when even the third place company — Sprint-Nextel (NYSE: S) — is struggling with losses and subscriber attrition. AT&T and Verizon (NYSE: VZ) are too big and have too much market share to be challenged. And the wireless subscriber level in the U.S. is nearly 300 million. In other words, without a growing pie, the battle is over market share.

There is often speculation that Sprint and T-Mobile might combine. Yet, two weak companies cannot make a strong one. Sprint is also saddled with debt, and the infrastructures of the firms are not compatible.

T-Mobile has been orphaned by its own parent, and no company will risk picking it up.

Douglas A. McIntyre

Sprint will offer people who are AT&T (NYSE: T) and Verizon Wireless customers $100 or more for their iPhones if they become Sprint customers. The money is a “trade in”, which acts as a credit for the cost of the Sprint subscription. If the Sprint program does not work, it will be one more nail in the coffin as investors and customers view the No.3 wireless company as no longer viable. Sprint, in other words, cannot afford to have the program be a bust.

The odds that Sprint will pick up a large number of the AT&T and Verizon customer bases are poor. AT&T and Verizon has complex cancellation policies which can cost customers a great deal to cancel. Many subscribers do not want to pay these fees no matter what Sprint’s proposition is. Another customer worry, although it may be naive, is likely to be whether the transition will allow them to take all of their services and data files with them.

And, finally, as DailyD points out, the iPhone 5 will be out soon. So, why would anyone move to Sprint until each of the major carriers sets iPhone 5 pricing and plans?

Douglas A. McIntyre

The unofficial closing bells put the DJIA down 74 points to 12,368.47 (-0.59%), the NASDAQ fell nearly 35 points (-1.24%) to 2,778.79, and the S&P 500 fell -0.74% or nearly 10 points to 1,295.17.

There were several analyst upgrades and downgrades today, including LinkedIn Corp. (NYSE: LNKD) reiterated as ‘buy’ with a target price of $135 at Canaccord Genuity; Dendreon Inc. (NASDAQ: DNDN) started as ‘sell’ at Maxim; Bank of Ireland (NYSE: IRE) cut to ‘sell’ at Deutsche Bank; Phillips 66 (NYSE: PSX) started as ‘buy’ at UBS; and Sprint Nextel Corp. (NYSE: S) raised to ‘buy’ at Guggenheim.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: ANN Inc. (NYSE: ANN) is up 3.25% at $26.69; Brown Shoe Co. Inc. (NYSE: BWS) is up 21.4% at $10.63 (more coverage here); Progressive Corp. (NYSE: PGR) is down -0.1% at $21.32; and Footlocker Inc. (NYSE: FL) is up 8.9% at $30.50.

Next week we are scheduled to get earnings reports fromTech Data Corporation (NASDAQ: TECD); Urban Outfitters Inc. (NASDAQ: URBN); Autozone Inc. (NYSE: AZO); Best Buy Co. Inc. (NYSE: BBY); Dell Inc. (NASDAQ: DELL); PetSmart Inc. (NASDAQ: PETM); Ralph Lauren Corporation (NYSE: RL); Big Lots Inc. (NYSE: BIG); and Hewlett-Packard Co. (NYSE: HPQ) among others.

Other standouts from today include the following stocks:

Renren Inc. (NYSE: RENN) is down -20% at $4.99. The Chinese Internet company is getting whacked on Facebook’s IPO. More coverage here.

GSV Capital Corp. (NASDAQ: GSVC) is down -18.6% at $13.10. The investment company had a nice hunk of Facebook shares at a very low price — all the value is in today. More coverage here.

Zynga Inc. (NASDAQ: ZNGA) is down -16.3% at $6.92 after posting a 52-week low of $6.90 earlier today. Another stock that climbed on Facebook’s back during the run-up to the IPO, shares were stopped by an automatic trigger shortly after FB shares opened today. More coverage here.

Stay tuned for Monday. Atlanta President Dennis Lockhart is giving a speech. We have also noted the following events on the schedule (all times Eastern):

• 10:00 a.m. – Existing home sales
• 10:00 a.m. – Richmond Fed manufacturing index
• 11:30 a.m. – 3- and 6-month bill auctions

Your email address

subscribe

terms and conditions

Have a great weekend!

Paul Ausick

Angie’s List, Inc. (NASDAQ: ANGI) Started as Outperform at Raymond James.

Bankrate, Inc. (NYSE: RATE) Cut to Neutral at Goldman Sachs.

Bank of Ireland (NYSE: IRE) Cut to Sell at Deutsche Bank.

Dendreon Corporation (NASDAQ: DNDN) Started as Sell at Maxim.

Las Vegas Sands Corporation (NYSE: LVS) named Bull of the Day at Zacks.

LinkedIn Corporation (NYSE: LNKD) Reiterated Buy with $135 target at Canaccord Genuity.

Micron Technology Inc. (NASDAQ: MU) Started as Buy at ThinkEquity.

Morgan Stanley (NYSE: MS) Raised to Buy at UBS.

Phillips 66 (NYSE: PSX) Started as Buy at UBS.

Salesforce.com (NYSE: CRM) Reiterated Buy with $180 target at Canaccord Genuity.

SanDisk Corporation (NASDAQ: SNDK) Started as Hold at ThinkEquity.

Sprint Nextel Corporation (NYSE: S) Raised to Buy at Guggenheim.

Tupperware Brands Corporation (NYSE: TUP) Cut to Hold at Argus.

Yelp, Inc. (NYSE: YELP) Started as Market Perform at Raymond James.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

Your email address

subscribe

terms and conditions

JON C. OGG

The kinds of crimes these executives commit generally fall into one of two categories. In the first case, CEOs mean to profit directly from their actions, including offenses such as insider trading and embezzlement. Examples of this include Tyco’s CEO Dennis Kozlowski and Adelphia’s CEO Jonathan Rigas, who each stole millions of dollars from their companies.

In most other cases of executive white-collar crime, however, CEOs are not stealing directly from their companies. Instead, they are trying to ensure the safety of their jobs by promoting the appearance of success of their companies through fraud, false accounting and bribery, among others. In seven of the 10 cases, executives inflated company profits or failed to represent gains or liabilities. In nearly every case, the CEO was in league with other executives, many of whom also charged and convicted.

The irony is that while these corporate leaders were trying to make their companies look better, they usually succeeded only in putting them through a period of severe financial hardship, as was the case with Rite Aid. In several cases, such as Adelphia and Enron, the financial revelations were so severe, causing total bankruptcy. In a few cases, Tyco for example, the company continued to perform well, despite the crimes.

24/7 Wall St. examined the CEOs who have been arrested while heading Fortune 500 corporations.

AT&T Inc. (NYSE: T) has been talking about a similar plan for at least a year now, while Sprint Nextel Corp. (NYSE: S) and T-Mobile USA, which is owned by Germany’s Deutsche Telekom AG (OTC: DTEGY), still focus on family plans that offer limited 4G data for up to two phone lines, which is not the same thing.

The carriers see the shared data plans as a new opportunity for growing revenues. The new iPad from Apple Inc. (NASDAQ: AAPL) with its high-resolution retina display can chew through a standard 2 Gbyte data plan in just a couple of hours of streaming video.

At its investor meeting yesterday, Verizon had this to say:

As [subscribers] start to migrate into 4G, they will have to come off of unlimited and go into the data share plan. And that is beneficial for us for many reasons, obviously.

And that “obviously” means that more subscribers will purchase the more costly cellular-enabled tablets and use more data, boosting monthly payments to Verizon Wireless. With only Verizon and AT&T likely to offer the plans, at least at the beginning, subscribers should not be looking forward to any great bargain. The shared data plans are not intended to be a public service.

Paul Ausick

Japanese GDP

Japan’s surprisingly sharp rebound in gross domestic product shows how resilient its economy can be despite years of growth that has been hobbled by a sort of stagflation, and more recently, the value of the yen. GDP rose at an annualized rate of 4.1% in the first quarter. Almost 40% of the improvement was due to government expenditures to rebuild parts of Japan after the horrible earthquake a year and a half ago. But even the speed with which the government turned on stimulus to fuel this is impressive. The Japanese consumer also was active in the period. Sales of cars and other consumer goods were strong. The earthquake may have shattered a large part of the economy, but many consumers have put that behind them, at least as far as their spending habits are concerned.

Shaky Greece

The situation in Greece almost certainly will drag on for another month. A caretaker government is about to take over ahead of June elections. Greece may say it cannot make the next debt payment, which is due before voters go to the polls. It could become obvious, well before the vote, that enemies of austerity will be clear winners. There is still no consensus about what happens if Greece leaves the eurozone. Some economists believe the impact will be benign. Debt held by banks and the International Monetary Fund could be wiped out. It is too early to predict what that would mean, other than to say some large private financial firms may barely survive it, if pessimists are correct. Greece’s own banking system took a blow, which is a signal for what will continue to happen to the financial companies there. The European Central Bank said it would not provide capital to four Greek banks it believes are insolvent. As Greeks continue to take money out of bank accounts, the trouble will only get worse.

Verizon Plan Changes

Verizon (NYSE: VZ) will end its unlimited data plan for existing subscribers. As customers upgrade to superfast 4G LTE service, Verizon will use the opportunity to take away something many consumers thought was routine pricing. 4G networks carry larger amounts of data than 3G ones. Verizon will make the case that the expense of customers who use these networks is high. Verizon has a strong enough lock on the American market to hold most customers to such a plan. So does AT&T (NYSE: T). Sprint (NYSE: S) and T-Mobile are in another class. They cannot alienate their smaller pools of customers and need to try to take subscribers from their larger rivals. Their one point of leverage could be to keep 4G unlimited plans and promote them as superior for heavy users of data on 4G networks.

Douglas A. McIntyre

T-Mobile’s customer base is about 35 million. Sprint’s is 50 million. AT&T and Verizon (NYSE: VZ) have about double the Sprint count. AT&T Wireless and Verizon Wireless have rich parents, each of which can draw money from their dwindling but profitable landline businesses, as well as wireless subscriber units that also have high margins. Each can afford to pay for aggressive infrastructure expansion of 4G ultrafast wireless networks. Each easily can afford to pay Apple (NASDAQ: AAPL), the most important chess piece in market share battles, the subsidies it demands for the iPhone.

T-Mobile has just announced it will cut 900 positions. The cuts will continue. DT is not likely to want to support a business that it must already know has no future.

Sprint and T-Mobile are faced with the difficult reality that each is too small and has no ready chance to grow. The technologies of the two companies are not entirely, or even partially, compatible. This makes a merger between them unlikely. Either could marry with smaller MetroPCS (NYSE: PCS). Sprint was close to such a deal, which would have cost $8 billion, but its board of directors rejected the plan as too risky and expensive.

There will be no foreign buyers for Sprint or T-Mobile, although several huge telecom companies in Europe and Asia could afford to make offers. They have watched Deutsche Telekom, one of the world’s largest carriers, struggle to keep T-Mobile afloat without any success.

T-Mobile’s presence in the United States probably will continue for years, as it becomes orphaned by its parent and slips inexorably toward ever greater loses.

Douglas A. McIntyre

CalPERS vs. Jamie Dimon

The California Public Employees Retirement System (CalPERS) remarked that it will pressure the JP Morgan (NYSE: JPM) board to split the CEO and chairman roles to water down the power of long-time leader Jamie Dimon. Under most circumstances, the proposal would be ludicrous. But JP Morgan just admitted that it lost $2 billion on a series of trading positions. Top management at the investment unit already has been forced out. No one has shown conclusively that Dimon knew the details of the risks or the trades themselves. There are concerns that he did push his traders to improve results, which could have fostered a dangerous attitude toward risky positions. CalPERS does not have the votes to win the issue, but it can further embarrass Dimon and his board.

Facebook’s IPO

The price of Facebook’s IPO is likely to fall between $34 and $38. That is above the previous forecast of $28 to $35. Of course, this means that demand for shares has risen sharply in the past few days. This is despite evidence that Facebook’s revenue growth has slowed and its mobile sales are almost nonexistent. The lure of the offering remains Facebook’s 900 million users. Investors believe that there must be some way to turn that population into tens of billions in high-margin revenue. Facebook still may be able to pick the lock of display advertising, which it has been unable to sell at high prices. Whether it can win a race to smartphones against other social networks, like Twitter, and search companies like Google (NASDAQ: GOOG) is less likely. Only so many angels can sit on the head of the mobile device pin.

Wireless Customer Satisfaction

Customer satisfaction with wireless subscriber companies steadied last quarter, according to the widely followed American Customer Satisfaction Index. On a 100-point scale, AT&T (NYSE: T) and T-Mobile each posted a 69. Verizon’s (NYSE: VZ) wireless division has a score of 70, and Sprint-Nextel (NYSE: S) came in first at 71. The news is good for Sprint, which has been criticized for poor customer service in the past. It probably will not keep the company from bleeding subscribers. AT&T and Verizon Wireless continue to take customers in a U.S. market that is not growing. What is notable about the figures is that 70 is a low score. Even though the four companies have similar levels of satisfaction, it is at a poor level.

Douglas A. McIntyre