Mad Mail: What's Wrong With eBay?

Dear Jim: I have a problem deciding if Sepracor is a good trade or not. This company just reported and missed its quarterly earnings estimates and lowered its full-year guidance. Then they bumped up their 2008 full-year estimates. The end result of this is a higher growth rate when comparing 2007 to 2008 earnings. Should SEPR get a higher multiple because of this, or is this really a smoke screen? --John

Cramer says: “Their main drug is slowing. It has competition. I don’t want to touch it for a trade or an investment. I suggest you buy Celgene, which is not slowing.”

Dear Jim: Boo-yah from above the Arctic Circle! You have quite a few fans up here in the oil and mining world. I am completely stumped by my recent pick. It posted earnings more than 20% above consensus and approached $44 after hours. During that show, you said, “Do not sell this stock!” It has since been fighting to get out of an almost 20% dip downward. Can you please tell me what’s going on with eBay? --Jason in Alaska

Cramer says: “I am aghast. I don’t get eBay. I think that PayPal’s worth a lot of money. I think eBay is a buy. I’m betting the analysts that downgraded it are wrong.”

______________

Dear Jim: I make dinner as I happily watch you each night. My question is about trading: When I submit a stop-limit order on a buy order, what are the parameters I should use to decide on the activation price and the limit price? --Julianne

Cramer says: “We never use stop orders. You get a quick down draft and then you’ll be out of the stock, then it’s going to bounce right back. We never do that.”

______________

Dear Jim: Jersey Shore Boo-yah! Office Depot delayed earnings, and the stock fell about $3. Even though they haven’t given a date for releasing, earnings have been downgraded all over the Street, and yet the stock is up every day. It was up 75 cents yesterday. What’s the deal?

Cramer says: “In Cramerica, accounting irregularities equal sell. They’ve got them a boatload. I’m not touching that stock.”

Dear Jim: I have owned Transocean now for one year (and what a great year it’s been). With the pending merger with GlobalSantaFe, what do you see the stock doing after that great dividend? It’s hard to see why it’s time to sell with oil services in such bull mode. Thanks for your thoughts. --Will

Cramer says: “I think that you buy the stock right before the dividend. Then after the dividend, I think the stock is going to bounce.”

Questions for Cramer? [e-mail]

Questions, comments, suggestions for the Mad Money website? [e-mail]