Travelzoo to Effect Reverse/Forward Split

Really, you're just too much of a bother and a cost for online travel site Travelzoo (NASDAQ: TZOO  ) .

Finally carrying out a plan it announced this past June, Travelzoo said yesterday that, in the next two weeks, it will effect a reverse/forward stock split as a means of shedding small investors who are a drag on account administration costs. That is, assuming that it gets an updated "fairness opinion" approving the maneuver from an independent financial advisor, and the special committee that it set up for the purpose signs off on it.

Under the proposal, Travelzoo will conduct a 1-for-25 reverse stock split or, for every 25 shares of stock you own, you'll get one new one. Any fractional shares will result in a cash payment for the amount. Investors who own less than 25 shares of stock will receive cash only and be effectively booted from ownership in the company.

Immediately after the reverse split happens, Travelzoo will effect a 25-for-1 forward split -- for each share you own, you will get 25 new ones.

When it originally announced the plan at the beginning of the summer, the travel site estimated it would reduce the number of its shareholders from over 90,000, to fewer than 10,000, and now estimates approximately 655,000 of its outstanding shares will be fractionalized. Shareholders approved the transactions at their annual meeting on Sept. 12.

Of course, once the shenanigans are completed, an investor could use the proceeds received to buy back into the stock again.

Shares of Travelzoo closed down today 2.5%, or $0.54, to $20.99.


Read/Post Comments (5) | Recommend This Article (2)

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  • Report this Comment On November 02, 2013, at 9:38 AM, definer wrote:

    This will be interesting. Most of the ownership folks that they will shed are probably like me, ones who took advantage of their promotional "free shares" before they went public. They limited the number of share you could own I believe the maximum was ten. It will be an extra $200 buck or so in my pocket, so that will be nice.

  • Report this Comment On November 03, 2013, at 6:34 AM, TMFCop wrote:

    definer,

    That's pretty interesting. There were a lot of gimmicks being used by Internet companies back then and the "free shares" offered by Travelzoo was one of them.

    From what I understand, most of the shareholders who got their stock that way couldn't actually sell their shares easily since they weren't held at a brokerage but were actually held by TZOO. They probably got tired of all that extra accounting.

    But money's money for you at this point. Cheers!

    Rich

  • Report this Comment On November 11, 2013, at 3:00 PM, korasree wrote:

    Wow! I have 10 shares allocated during land before time. I lost track of the account. Time to get a hold of TZOO customer service (if there is one).

  • Report this Comment On November 25, 2013, at 5:18 PM, jhendry01 wrote:

    One of the problems will be that if you don't have the actual stock certificates (I don't), you will have to pay some kind of a premium to cash in your shares. So if you have 10 shares at $20, I'm guessing it will cost $2/share for the "missing" certificate.

  • Report this Comment On April 21, 2014, at 6:19 PM, jdhumphrey wrote:

    This was news to me as I missed it last summer and fall. I don't know if I would have remembered having 'stock' in TravelZoo without the article. I received a letter from our state auditor today telling me I had unclaimed funds in the amount of $137.44. I am still at the same address, so I don't know why I never received the check from TZ, but glad that I'm getting it now. ;) If you haven't heard from TravelZoo, maybe you should check with your state office of unclaimed funds...

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