For Oracle, Timing Is Everything

Cramer thinks eBay and Yahoo! rumors may also slow recent declines.
Author:
Publish date:

Oracle

(ORCL) - Get Report

sure played its part well. Everything sounded terrific there. (I am long it and bought more after the conference call in after-hours trading.)

The action in

eBay

(EBAY) - Get Report

, which may or may not be in talks to be acquired by

Yahoo!

(YHOO)

will confirm the positive action in the once beaten-down business-to-consumer segment. I am long both; these days the acquirer gets hammered but I think the deal makes a ton of sense. eBay needs to be a part of a larger organization and it would fit well with Yahoo!

Both of these positives might stem the declines. I know they made me feel like I wish I had been more aggressive after I breezed in from that Liberty Science Center field trip. If Oracle and eBay are good there is a lot of other stuff worth buying.

Having spent the last three hours piecing together what happened near the end of the day, I come up with a margin-call thesis. The last hour of trading went down so much because the new higher margin rules at a lot of the more aggressive brokers kicked in.

That meant once

InfoSpace

(INSP) - Get Report

, to pick on a name that got clocked, started its momentum on the downside, the margined folk got sold out. You borrow and don't have the capital, you get sold out at the end of the day. Them's the rules.

If there is anything I hate more than penny stocks, it is margining to buy after we have had such a huge run. The

Nasdaq

has ramped so much, who in his right mind would be leveraging up here? Take something off the table, don't be margin clerk roadkill.

And don't email me about this either. I am right; you are wrong.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long eBay, InfoSpace, Oracle and Yahoo! His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.