"Shares of online publisher Travelzoo (TZOO:NYSE) closed above $100 for the first time Tuesday, and they traded even higher on Wednesday."
"Thus, Travelzoo -- a company that had net income of $4.4 million on $23.2 million in sales in the first nine months of the year -- is trading at about 250 times estimated 2004 earnings. It enjoys a market capitalization of $1.7 billion.
"How crazy is that? Well, for the $1.7 billion it would take to buy the Web site -- which lists cheap airfares and other travel bargains -- you could buy three actual airlines themselves.
"Yes, you'd have enough money to buy Continental (CAL:NYSE), Delta (DAL:NYSE) and Independence (FLYI:Nasdaq). Not only that, you'd have enough money left over -- at least $100 million -- to pay Bill Gates an hourly wage to make your own travel-bargain Web site from scratch.
"Frankly, doing that makes about as much sense as paying 250 times earnings for anything."
(Note from me: TZOO did close below $100 today, at $98.89, after a pullback on Thursday and Friday. The company's market cap is still about a billion and a half dollars.)