Travelzoo CEO Sells Shares
Ralph Bartel, the chairman, CEO and founder of
Travelzoo
(TZOO) - Get Report
, has finally cashed in on last year's surge in his company's shares.
A regulatory filing late Monday reveals that Bartel sold 685,000 shares in two separate transactions on March 11 and March 14. In one transaction, he sold 167,879 shares at $56.31; in the other, he sold 517,121 shares at $48.08.
The sales generated about $34 million in proceeds for Bartel.
The announcement may explain some of the heavy selling pressure in Travelzoo shares the past few days. The stock has lost 20% of its value since March 10, when it closed around $60.
The sales were not a surprise. Bartel had indicated months ago in a regulatory filing that he intended to sell some of the 13.2 million shares he owned. Before the sale, Bartel owned about 84% of Travelzoo's outstanding stock.
In the filing, the company said "Bartel has advised us that the proposed sale of his shares under this prospectus is motivated by his desire to diversify his investments and reduce his investment risk, and that the reasons for the sale are related only to the management of personal investments.''
Shares of Travelzoo, a so-called low-float stock with just a few million shares available for trading, have been extremely volatile the past year. Last March, the stock was trading below $10 a share, but it surged by year's end to $110. At one time, Bartel was worth $1 billion on paper because of the appreciation in Travelzoo stock.
For much of this year, shares of Travelzoo have been falling, as more shares are becoming available to the public. The first big plunge occurred when a group of hedge funds sold some 750,000 shares they had purchased in a private placement.
After that initial bout of selling, the stock had fallen to $50 a share in mid-February. In recent weeks, the stock had rallied back, trading higher on no apparent news.
The sale of Bartel's shares took place even as the
Securities and Exchange Commission's
Boston office is conducting an informal inquiry into trading in Travelzoo stock. One thing the SEC is looking into, according to Travelzoo, is the selling of stock by some of Travelzoo's executives. The company has said it has "provided information concerning any transactions in the company's shares by its officers, directors and employees, including Ralph Bartel, the company's CEO."
The company disclosed the inquiry in January as the online travel-publishing company also announced fourth-quarter earnings that were weighed down by unexpected costs associated with a six-year-old stock-giveaway promotion.
After the two sales, Bartel owns about 80% of the company's outstanding stock, or some 12.7 million shares.