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EBAY Downgraded By Evercore

|Includes: eBay Inc. (EBAY)

The Street Insider (12/4) reported this AM:

Evercore Partners downgraded eBay (NASDAQ: EBAY) from Overweight to Equal Weight with a price target of $58.00 (unchanged).

Analyst Ken Sena said, "Our rating revision weighs eBay's large addressable markets and undemanding valuation against the potential for sustained take-rate pressure within Payments and a higher level of investment across segments. Moreover, while we do not see valuation risk at these levels, we do suspect the potential for further negative estimate revisions, including its 2015 guidance. As a result, we expect less potential for outperformance and view Equal-Weight as more appropriate."

"In the U.K., we see retailers more effectively competing on customer conveniences, becoming savvier with respect to payment fees, and exploring partnership opportunities to address multi-channel needs. While multi-channel partnership opportunities are good for eBay, we see more risk of higher investment at a potentially lower take-rate," he added.

Later in the day, Jim Cramer added that the Evercore analyst must know something, and that "I would not own EBAY....We got rid of it".

The stock, which had been recovering from opening down to apx. 50.5 had been recovering to about 51.5 and then cratered again to about 50.5 after the video of Cramer came out. The stock recovered to close just above 51, down about 1.6% from the previous day's close. Volume: apx. 15.5 million.

Overall, the stock didn't take that much of a beating either on the % decline or on the volume, despite this downgrade and Cramer's comments. In considering the words of the analyst, it would seem that there is EBAY is caught between being a growth stock and being a value stock. EBAY is really a reasonably growing, reasonably priced stock. If EBAY beats numbers or has upward revisions, the growth crowed will go bananas, but if it merely meets numbers or is slightly below, the reasonable growth at a reasonable price crowd likely will support the share price. In some ways, EBAY's hybrid status of being somewhere between a growth stock and a value stock makes it perfect for selling covered calls.

Interestingly, I have read criticisms of EBAY--that its price to revenue of apx. 4 is too high--apx. double that of AMZN. Funny that people are comfortable paying p/s around 10 for go go growth stocks, some with no earnings, and yet they get their knickers in a twist over 4 times sales for a solid, steady grower with real and consistent earnings and compare it to AMZN, which is only marginally profitable.

Disclosure: I am long EBAY.