tumbled 12% Wednesday, as the travel search engine gave back some of its recent huge gains.
The stock, which has more than doubled since its first-quarter earnings beat analysts' forecasts on April 18, was down $6.15 to $42.99 in late-afternoon trading, continuing a decline that started Tuesday. Analysts have attributed the dramatic gains in the share price to a short squeeze that started when investors who bet that the stock will fall needed to cover their positions.
This marks the latest wrinkle in the saga of Travelzoo. Two years ago, Travelzoo was one of Wall Street's top-performing stocks, peaking at $110 a share in late December 2004. This made founder and chief executive Ralph Bartel very wealthy.
Bartel can't be accused of taking an excessive salary. Last year, Travelzoo paid him $280,373 and didn't give him a bonus. He had beneficial control over 78% of outstanding shares as of the end of last year, according to a recent filing with the
Securities and Exchange Commission
"His salary has been fairly stable over the past few years," says George Mihalos, an analyst with Gilford Securities who rates Travelzoo hold and doesn't own the shares. "There are actually people who make more than him in the company in terms of salary."
Last year, Bartel set up a trust based in the Isle of Man for personal financial planning purposes. The vehicle, The Ralph Bartel 2005 Trust, owns 12.6 million shares of the New York-based company, according to a Jan. 9 filing with the SEC. The Isle of Man, located in the Irish sea, is considered a tax haven.
In an interview, Bartel said he set up the trust for personal financial planning purposes. He denied that it was unusual.
"I don't believe that there is a perception problem," he wrote in an email.