Updated from 2:04 p.m.
is on the loose again.
The online travel stock surged 10% Monday, adding to an eye-popping weeklong runup since last Tuesday's earnings blowout. The stock has now risen nearly 150% over the five sessions since the company
beat first-quarter earnings estimates by a dime.
Daily volume in Travelzoo, after ranging from 45,200 shares to 433,100 shares over the previous month, averaged 6 million shares last Tuesday through Friday. More than 7.4 million shares had changed hands Monday as of 2:55 p.m. EDT.
Two years ago, Travelzoo was one of Wall Street's
top-performing stocks, peaking at $110 a share in late December 2004. Shares of the New York-based publisher jumped $4.53 to $48.88 Monday, after earlier touching $52.25. Travelzoo declined to comment.
Travelzoo's latest move is from "a good quarter and a short squeeze," says Scott Devitt, an analyst with Stifel Nicolaus, in an email. He is one of three analysts to officially follow the stock. He rates the shares a hold.
Travelzoo has been a favorite of short-sellers, who profit when share prices fall. About 38% of the company's 3.4 million-share float has been borrowed by investors who profit when the share price drops, according to Bloomberg data.
Short-sellers make money when they borrow shares of a company through a broker and immediately sell them, with the aim of later repurchasing the stock at a lower price. Then they return the shares to the lender, pocketing the difference. When the shares rise, short-sellers are forced to buy replacement shares at a higher price, taking a loss on their investment. This leads the stock higher and is called a short squeeze.
Adding to the excitement Monday was news that
, operator of the Orbitz travel Web site, had
gotten bids for its travel business, which the company had planned to spin off to shareholders. Media reports put the bids in the neighborhood of $4 billion. Cendant rose 57 cents to $17.42.
Also gaining was
travel spinoff that's due to post first-quarter numbers next month. Expedia rose 30 cents to $18.70.