The pioneer of online travel bargains and darling of Wall Street in trouble with SEC and earning results.
Travelzoo reported that the Securities and Exchange Commission is investigating possible insider trading in 2004. And, the company reported fourth-quarter results that fell short of Wall Street estimates, causing its shares to fall 25%.
On of the best stock performers in 2004, Travelzoo’s most popular feature is a free online newsletter listing what it calls the Top 20 travel deals. The newsletter refers visitors to the Web sites of companies who pay for their deals to be listed, which is how Travelzoo makes all its money.
Some analysts question the sustainability of Travelzoo’s business model, as it is easily replicated and exceeded by a larger company like Yahoo.
Ralph Bartel, is Travelzoo’s founder and CEO. The New York-based company’s revenues for 2004 was $10.5 million, up from $5.2 million the year prior.
Reported by Charles Kao
