eBay Could Get Easier to Own Soon

Warming to eBay (EBAY - commentary - Cramer's Take). Have to. When you get a slamma-jamma type of article like we had this weekend in The New York Times, one of those unbelievably harsh articles, and it doesn't mention that listings are actually up huge year-over-year, you have to take it with a box of Morton's Salt.

It's so chic to take shots at eBay these days. The guidance was a bummer. The quarter was a bummer. The arrogance is a bummer. The valuation? Look, no one likes to pay 50 times earnings for anything. You won't find me buying it. However, if it drops from here, if it ever were to sell at 40 times earnings, given its 40% growth rate, is that too expensive? Must all stocks sell at 20 times earnings or less to get adherents?

Mind you, I think that eBay's a very tough stock to own. Like Google (GOOG - commentary - Cramer's Take), the company seems to be doing little to help itself.

Let's understand that the eBay chink, as explored by the press, is that the sellers don't like the listing fee increases. To me, eBay's raising prices to please Wall Street, which is always stupid. But what if the discounts that it is now giving stick? What if it wins back the recalcitrant managers? What if eBay is still the only game in town, even after the price increases? One of the dumbest criticisms I hear about eBay is that if you raise prices enough, the sellers will go elsewhere. Where? To the newspapers? To magazines? To television? Oh, please.

This morning, Bear Stearns put out its listings analysis of eBay. The numbers were startling: U.S. listings up 37% year-over-year. Do some math; you raise prices, listings still grow 37% -- not bad.

Remember, the Achilles' heel of eBay is not eBay itself; it's the others. If someone could offer the breadth of buyers and sellers and come in well under eBay in price and still make money, then eBay's still a short.

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."