Flying home to New Jersey from Chicago after the first two days at his new job, Sergey Aleynikov was prepared for the usual inconveniences: a bumpy ride, a late arrival.

He was not expecting Special Agent Michael G. McSwain of the F.B.I.

At 9:20 p.m. on July 3, Mr. McSwain arrested Mr. Aleynikov, 39, at Newark Liberty Airport, accusing him of stealing software code from Goldman Sachs, his old employer.

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A computer programmer working for Goldman Sachs was arrested last week on charges that he stole proprietary source code for software his employer uses to make sophisticated, high-speed, high-volume stock and commodities trades.

Sergey Aleynikov, who earned nearly $400,000 in his job, allegedly stole 32 megabytes of data over four days in June and transferred it to a website hosted in Germany before trying to erase his tracks from Goldman Sachs’ network.

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Wow, an actual, honest-to-goodness, venture-backed software IPO.

We’re getting one today.

SolarWinds Inc. (SWI), an Austin-based provider of network management software, on Tuesday priced an IPO of 12,116,279 shares at $12.50 apiece. The company is selling 9 million shares in the offer, with selling holders–including various officers of the company and several venture investors–offering the rest. The selling holders will sell up to an additional 1,817,441 shares to cover over-allotments.

The banks on the deal include J.P. Morgan (JPM), Goldman Sachs (GS) and Morgan Stanley (MS), with Jefferies & Co. (JEF), Thomas Weisel (TWPG) and Ladenburg Thalmann as co-managers.

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Goldman Sachs analyst David Bailey this morning upped his estimates on Apple (AAPL) ahead of the company’s fiscal second-quarter earnings report, which is due after the close next Wednesday.

Bailey is looking for FY Q2 revenues of $8 billion, at the high end of the company’s guidance range of $7.6 billion to $8 billion, which would be down 21 percent sequentially, but up six percent year over year. He thinks gross margin will be about a point better than the company’s target of 32.5 percent, due to favorable component costs and product mix. As a result, Bailey upped his EPS estimate for the quarter to $1.07 from $1, which puts him a penny below the Street consensus of $1.08. Apple’s guidance had been for 90 cents to $1.

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Cisco Systems (CSCO) shares are headed lower this morning after Goldman Sachs analyst Simona Jankowski cut her rating on the stock to Neutral from Conviction Buy, noting that the stock had reached her $18 price target. Jankowski writes that she maintains a positive long-term view on the stock, “as Cisco’s execution and balance sheet position it well to benefit from favorable secular trends in IP networking.”

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Best Buy (BBY) shares are getting a boost this morning from a bullish note by Goldman Sachs analyst Matthew Fassler, who added the stock to his firm’s Conviction List. Fassler had upgraded the stock to a Buy rating in early January. He has a price target on the stock of $33.

Fassler expects the company to benefit from the demise of rival Circuit City. He now sees EPS for the February 2009 fiscal year of $2.40, up from $2.27. For 2010, he goes to $2.54, from $2.47. Fassler thinks the company will capture a significant portion of the “freed-up” Circuit City sales.

Slightly tempering Fassler’s enthusiasm for the shares is a view that once the market adjusts to the disappearance of Circuit City, the company will have to take on Wal-Mart (WMT) and Amazon.com (AMZN).

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Sun Microsystems (JAVA) shares are coming under pressure this morning after Goldman Sachs analyst David Bailey cut his rating on the stock to Sell from Hold. He cut his target price to $3, from $5.

“Sun’s heavy concentration of financial services, telecom and manufacturing customers and overweight dependence on a secularly declining segment (UNIX servers) put Sun at a disadvantage during this downturn versus more diversified competitors,” he writes in a research note. He says most of this is in the stock–down 79 percent in 2008–but says that a 76 percent uptick in the stock since the beginning of December and a 30 percent move in just the past three days “creates a compelling entry point,” by which he means a chance to short the stock.

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Baidu (BIDU) shares have spiked today, after Goldman Sachs analyst James Mitchell raised his rating on the stock to “Conviction Buy” from Neutral, while maintaining his recently reduced $145 price target.

Mitchell offers a variety of reasons for his more bullish posture on the Chinese search engine:

• He observes in his research note that the stock now trades at just under 20x 2009 estimated non-GAAP earnings.
• He notes that paid search is just two basis points of GDP in China, versus 9-12 basis points in developed search markets.
• Mitchell sees search spending climbing at about 30 percent a year in China for several years and believes Baidu can maintain query share–with government help and consumer loyalty–giving the company 30 percent revenue and EPS growth.

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Goldman Sachs analyst Tim Boddy today upped his rating on Nokia (NOK) to Neutral from Sell, asserting that emerging market risks to the story are now better understood, earnings estimates and guidance are now more realistic, and products risks “are starting to reduce.” In a research note, Boddy asserts that while macro uncertainty remains high, “Nokia’s ’survivorship premium’ is likely to expand if the outlook worsens further.”

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Goldman Sachs this morning added Research In Motion (RIMM) to the firm’s Conviction Buy list, replacing Cisco Systems (CSCO), which still remains Buy rated. The company also removed Riverbed (RVBD) from its Conviction Sell list, while maintaining its Sell rating.

“For RIMM, we want to take advantage of the stock’s very compelling valuation and upcoming catalysts, including to Storm launch and fiscal Q3 (November) earnings,” writes analyst Simona Jankowski. She notes that RIMM shares are down 62 percent over the last three months, compared with 51 percent for the average stock she covers and 32 percent for the S&P 500, on concerns of slowing demand and margin pressure as a result of competitive offerings from Apple (AAPL) and others.

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Numbers continue to ratchet lower for Dell (DELL) ahead of the company’s earnings report after the close Thursday for the fiscal third quarter ended October. While Hewlett-Packard’s (HPQ) preliminary results today impressed the Street, investors are more focused on the implications of recent ominous warnings from Intel (INTC) and others about the prospects for the rest of this year and 2009.

A number of analysts issued pre-earnings notes this morning and brought down numbers; these follow previous cautionary comments from analysts at Barclays, Merrill Lynch, Goldman, BMO Capital, Citigroup and Credit Suisse.

Cowen’s Louis Miscioscia today repeated his Outperform rating on the stock, but slashed his estimates. He now sees EPS of 31 cents for the October quarter, down from 34 cents; 30 cents for the January quarter, down from 35 cents; $1.30 for the January 2009 fiscal year, down from $1.39; and $1.25 for fiscal 2010, down from $1.49.

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Orbitz (OWW) shares are coming under pressure this morning after Goldman Sachs analyst Jennifer Watson cut her rating on the stock to Sell from Neutral. She slashed her price target on the online travel services company to $2.70, from $6.80. “Orbitz has grown gross bookings more slowly than both Expedia and Priceline, and we do not anticipate a reversal in a more challenging economic environment,” she writes. Watson also notes that leverage is high, with net debt 4x EBITDA, reducing flexibility. She points out that 50 percent of excess cash flow must be used to repay debt.

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Goldman Sachs this morning updates its three “Technology Framework Lists,” which include the firm’s top five tech growth picks, its top five tech value plays, and its five least favorite tech names.

Their top five growth picks now include:

• Apple (AAPL)
• Cisco (CSCO)
• Citrix (CTXS)
• Research In Motion (RIMM)
• Visa (V)

New to the list are Cisco, Citrix and RIM. Removed from the list: Oracle (ORCL). Other slots were created by stocks previously removed by stop-loss rules.

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SanDisk (SNDK) shares have received a boost today from Goldman Sachs chip analyst James Covello, who added the stock to the company’s Buy list with a $13 price target.

He writes that the stock’s valuation “is now too attractive to ignore.” He notes that the stock has fallen out of favor after Samsung pulled its $26-a-share takeover bid, but that “SanDisk retains some of the key IP in the NAND industry, which we believe is worth significantly more than what is priced into the stock today.” He says that if the company successfully renegotiates a license agreement with Samsung, even with a 50 percent reduction in royalty rate, the stock would be worth close to $20, even if you assume zero value for its card business and give them zero credit for balance sheet cash.

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Goldman Sachs analyst Mark Wienkes this morning repeated his Sell rating on Sirius XM (SIRI), while cutting his price target to 25 cents from 50 cents and trimming estimates. He contends that 2008 subscriber forecasts will be cut or missed.

“Our lowered estimates and price target reflect further erosion of satellite radio industry demand,” he writes. He says subscriber acquisition costs, average revenue per user and churn are all moving in the wrong direction, and notes that revenue has been unable to cover operating and capital expenses, leaving the company with negative free cash flow and dependent on the capital markets for ongoing funding. Wienkes contends that the company’s inability or unwillingness to have previously refinanced its capital structure “is now unlikely to preserve much, if any, equity value.”

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