"EUA estão totalmente comprometidos com NATO e artigo 5.º", garante Rutte

[Ulisses Pereira]

"eBay Becomes a Case Study in Momentum"

By James J. Cramer
03/27/2003 10:24 AM EST



"Raising numbers, eBay! There you have it, just what I have been saying. This morning, US Bancorp jacked up numbers for eBay, to $1.26 this year and $1.94 for 2004.

Wowie-zowie! It turns out that eBay is only selling at 45 times next year's earnings, not 50 times. Hoo-hah.


OK, moment of truth. If you are snickering at that, if you are thinking, what a joke, then you really don't have a clue about the way momentum money works. You may not even know the way growth money works. Here's why.

Momentum money just cares about the rate of rate of change: How often are numbers moving up and at what pace? eBay's numbers are moving up as quick as lightning, faster than any stock in the darned stock universe. So the buyers off this model are just seething to take more, right now.

The growth money guys, they are thinking, "OK, maybe $1.94 is really $2.25 and maybe this company is going to earn $3 in 2005 or $4 in 2006. Holy cow, that means it is selling at less than 30 times 2006 numbers with little competition and no prices increases built in. Darned cheap."

They aren't seething to buy, but they sure as heck want the stock to come in a dollar or two so they can snap it up.

Let's throw in another element. Read Helene Meisler: This sucker's going to $110 on the chart. That gives you still another cohort that is eager to buy.

That's a powerful lineup of buyers. Who is on the other side? Short-sellers, who are marveling that this stock isn't down more on a down big day. Mutual funds don't want to sell: They are anxious to mark the darned thing up. Insiders probably can't sell. The window most likely is closed.

So what do we get?

An explosive stock, one that could fulfill Helene's charting target in little time flat. (I didn't say "no time" because no stock is immune to bad Iraqi news ... yet.) "

(in www.realmoney.com)