Nokia dismissed speculation that its partnership with Microsoft could lead to a takeover of the Finnish company. Nokia described rumours that Microsoft was planning a bid for its core devices business as "completely baseless", and people close to both companies said there had been no talks about such a deal, the Financial Times reports. Speculation over a possible bid for Nokia has intensified after its shares plunged by nearly 18 percent when the company warned that sales and profit margins would be "substantially below" previous expectations in the second quarter. The stock fell a further 10 percent the day after the profit warning to its lowest level since 1998, but it recovered most of its losses by the close of trading as rumours of a Microsoft bid gained momentum. The two companies agreed in February to form an alliance that will see Microsoft's Windows Phone operating system embedded in Nokia phones. Nokia CEO Steven Elop reaffirmed that there had been no takeover discussion and said that he understood investors were waiting to see the new crop of Microsoft-based phones. "My principal focus and the focus of the team is to take care of the short term but make sure that the execution is flawless," Elop said at a technology conference outside Los Angeles.
