First of all, I put the limit under Travelzoo because it's Price to Earnings ratio had flown up over 200 and this bothered me. Even if the world seemed content to keep buying it I felt that there might just be a bit of a bubble here. This, and the fact that I had noticed it seemed to keep sliding backwards at the end of each week even after days in which it would shoot up 10 points, made me think that perhaps the party was over and I should go home.
But, as usual, there is even more to the story.
Travelzoo sold a buttload of stock to hedge funds at a discount some time ago. Those shares have just become eligible for sale. And sell they will. 750,000 of them are set to go "flush" today and tomorrow. And that means the stock will DIVE DIVE DIVE!!!
After that, the founder himself is scheduled to sell 750,000 shares of his own.
What was once a stock with few shares on the market, and thus a favorite toy of day traders, is now about to become as common as dog poo. The day traders will no longer be able to jack the price as easily and so it might actually have to trade on some of its' own merits.
I didn't know that the ridiculously high-flying price was the direct result of day traders, although the way the price kept jumping around gave me a strong suspicion that someone might be on crack. Now that I know, and now that 1.5 million new shares are about to saturate the market, I think that I am glad I set the limit on this stock and was forced to sell it before it landed at the bottom of the sea.
I can't complain when a free stock flies higher than the clouds and then dives like a duck that has just been shot out of the sky. I was lucky to get as much as I did for it. I'm just crying because I could have sold it 30 points higher and made even more. And that's just a waste of good tears.
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