Volatility Index S&P 500 Options-VIX up 0.24 to 13.53

Advanced Micro Devices Inc. (NYSE:AMD) calls (quoted in Pennies) busy on chatter of private equity cash infusion. AMD is recently up $0.46 to $13.87. AMD has been frequently subject to LBO chatter; today chatter is circulating that a friendly private equity-strategic partner could surface to make cash infusion. Speculation is that AMD could announce a deal similar to the deal Sun Microsystems Inc. (NASDAQ:SUNW) announced on 1/23/07, when it received a $700 million dollar private placement from KKR. AMD call option volume of 73,560 contracts compares to put volume of 9,747 contracts. AMD April option implied volatility of 41 is below its 26-week average of 45 according to Track Data, suggesting decreasing price risks.

eBay Inc. (NASDAQ:EBAY) implied volatility is low. Meg Whitman enters ninth-year working as eBay CEO. EBAY is recently up $0.23 to $31.72. Meg Whitman has an estimated net worth of $1.2 billion according to Forbes, much of it in EBAY stock. Years ago, Whitman said she would leave EBAY after eight to ten years. Whitman joined EBAY in 1998. EBAY has a market cap of $43 billion. Microsoft Corp. (NASDAQ:MSFT) has a market cap of $270 billion. EBAY overall option implied volatility of 34 is below its 26-week average of 37 according to Track Data, indicating decreasing risks.

Option volume leaders today are: SanDisk Corp. (NASDAQ:SNDK), AtheroGenics Inc. (NASDAQ:AGIX), Halliburton Co. (NYSE:HAL) and Qualcomm Inc. (NASDAQ:QCOM).

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

After first talking Dolby Laboratories, Inc. (NYSE:DLB) higher on the first segment of CNBC's MAD MONEY, Cramer said it is time to put away grudges on stocks. He thinks it's time to recommend eBay, Inc. (NASDAQ:EBAY).

He thinks even though it is run by Meg Whitman, has weak user trends, spent too much on Skype, and yada, yada, yada ...

Under $32.00 he likes it, and he said he can whip himself that it is up $9.00 from lows. He thinks it is still down 25% and now represents and "internet value stock." He said the bad news has been discounted into the shares. It trades under 26 times next year's earnings but growing at 21%.

He said Bear Stearns has it right. He thinks PayPal is still winning over Google's checkout. He likes the Shopping.com angle, and that eBay can now bring in new customers this way. He even went as far as to say that while he's been slamming Meg Whitman, that she has been wheeling & dealing, including a pact with Yahoo! Inc. (NASDAQ:YHOO). He also likes the recent deal with Baidu.com that started in November.

He likes ratios, with no debt, and says the company has been hoarding cash, with $3.2B in the coffers. eBay closed down 2.7% at $31.30 in normal trading, but is up at $32.05 after the comments.

Do you think Cramer will auction off a dinner with himself like Warren Buffett did?

Back in August, I suggested that we should perhaps start looking at eBay differently. It is a mature company, I argued, and hence would probably require different valuation methods, lower multiples, etc. At the same time, I noted, the market has a tendency to get there naturally.

Today, Fortune ran a fascinating article about eBay Inc. (NASDAQ: EBAY), the issues it is facing and its management team. The article naturally focuses on eBay's CEO, Meg Whitman, and on eBay's new president of its marketplaces business, John Donahoe, believed to be Whitman's successor.

eBay's share price has been halved from its December 2004 high of $59, as investors are concerned mostly with the slowing growth rates. While growth rates have been most concerning in eBay's core auction business, the Skype acquisition is also a focus, especially as the promised synergies haven't materialized yet. There is also the fierce competition in Asia, and let's not forget, several key people leaving.

Many note, quite accurately too, that eBay is a highly profitable company with enviable operating margins and still high growth. But most, even eBay's management, realize that the company is changing as it is entering the "grownup" realm of large and mature corporations, where size and age could potentially drag it down.

A few months ago, I started wondering about eBay's chief executive, Meg Whitman. It occurred to me that her tenure was growing old, and I speculated about whether she might step down in the next 12-18 months.

Today, I'm even more concerned about eBay's management team. The company has been rapidly losing all the bright stars who shone in my investing galaxy when I first decided to buy eBay back in 2000. Forbes has an illuminating look at the brain drain at PayPal, recently capped off by news that Jeff Jordan would be stepping down "for family reasons." Jordan, an executive that I met a few years before he took over as CEO of PayPal, is a charismatic, slick, management consultant type: in short, exactly the sort of person Meg has always preferred. As she said in her statement regarding his departure, Jordan is a friend.

Jeff Jordan's not the only friend Meg Whitman has lost. Maynard Webb, her longtime friend and eBay COO, retires next month, as I noted earlier. It's hard to say whether the other PayPal execs mentioned in the Forbes article had time to become friendly with Meg, but it's certain that their departure can't be a good thing. Instead of infusing life into eBay, they're out setting trends and making news at companies like YouTube (Chad Hurley), Slide (Max Levchin) and LinkedIn (Reid Hoffman), or directing oodles of money at hedge funds and venture capital firms.

Meg Whitman swung the massive club of her one million-plus eBay membership today, calling on each of them individually to get involved in the net neutrality debate in a personally-addressed email. She argued against the doctrine of "pay to play" to use the "fast lane" of the internet and said, "The bottom tier -- the slow lane -- would be what is left for everyone else. If the fast lane is the information 'super-highway,' the slow lane will operate more like a dirt road." Her missive asked each member to follow a link to send an email to their congressperson.

The debate, which pitches the internet backbone providers (like Comcast, Verizon and Time Warner's cable unit) against the biggest bandwidth users (like eBay, Google, Amazon.com, Microsoft and Yahoo!) is growing more bitter by the minute. Whitman's atypical move of sending email to her many members is seen as an unconventional approach in a battle that, to date, has failed to explain itself well to voters; although investors, certainly, can understand that the potential for huge profits hang in the balance.

We received this completely unfounded rumor in our tip line. I hardly knew whether to laugh or weep at the elegance. [Update: as far as we know, it's not based on anything but speculations; it was posted on an AOL message board and also sent to us. It immediately charmed us with its perfect solutions to a raft of divergent problems.]

You see, seven years ago, Warren Buffett visited Wharton, where I was getting my MBA. Buffett attended, but didn't graduate from Wharton, and occasionally returns for a speech. This was a doozy and I (with my best finance geek buddies, hi Jaime!) stood in line for hours for the much-coveted seats.

When he opened the floor for questions, I jumped at the chance, and asked him about his succession plans; both he and his partner and buddy, Charlie Munger, were getting on in years. He joked about the fact that he was coming to Wharton to scope out candidates. I said, "I'd love to!" and the audience, and Buffett, laughed. I almost fainted from the brush with greatness. He said something about living forever, and that was that.

Then last week, I wrote a post wondering if Meg Whitman was about to move on, having accomplished so much as CEO of eBay. Had she outstayed her welcome? I mused. About the same time, Buffett announced in his annual meeting that he might be spending a large chunk of cash -- $13 billion -- on a long shot and everyone wondered what it might be.

Why not eBay?

The big news today from eBay's analyst day was that Meg Whitman was promising: now, with even more revenue growth! Her presentation, and that of the other executives from eBay proper, PayPal and Skype, were really great. Evidently, either (a) you investors weren't watching or (b) without the analysts to tell you if it was good, you weren't ready to pull the trigger. After all, if a company talks to the analysts through market close, how can they affect the market? The stock was down a teeny bit, six cents, to $34.11, on a bit better-than-average volume.

Well. If you were online with me, you were armed with more info (you know, to toot my own horn, and all). I filled you in about eBay's view of their craigslist investment; how they planned to create synergies with Skype; how proud was the company of their 7% of worldwide long distance minutes; how PayPal will soon let you buy used books at your neighbor's yard sale with your mobile phone; and how $3 billion in cash was withdrawn from ATMs via PayPal debit cards. If I had to pick one thing I came away from those hours of watching Meg & team present (I mean, something substantial... I could go on forever about fashion choices but this isn't the style blog) it was that they really believe in their vision and they are fantastic at describing it. I was feeling a little scared off by the stock's rich price, but after listening to Meg, Bob, and the Skype and PayPal execs tell me about how they're going to change the world? Boy do I want to be along for the ride.