Travelzoo (NASDAQ:TZOO) is a fascinating company to watch, even more interesting than Taser International (NASDAQ:TASR). Heck, I think it's more exciting than beach volleyball or 100 Super Bowls.

I've lipped off a couple of times about the firm, which runs a fast-growing and profitable advertising-based business. I've got no bone to pick with the biz, nor management. But the stock's meteoric, logic-dodging rise -- it was up 20% yesterday -- is clearly unwarranted by underlying business. My last prediction was, "This fling can only end one way: badly." Since then, of course, the 'Zoo has doubled, but dangerous liaisons often last longer than they should. That's no proof that the relationship isn't dysfunctional.

The company was worth $700 million this morning, valuing the outfit at more than $2 million per paying advertiser and one C-note per member of its main product, an email list. Hey, I'm not knocking the email list. But what's it really worth?

The situation should remind you of (NASDAQ:AMZN), WebMD (NASDAQ:HLTH), or (NASDAQ:PCLN) back in the bad old days. It's not that these businesses were devoid of value; it's just that people were sacrificing their life savings at the altar of idiocy.

They were banking on the belief that there would always be somebody dumber than they were who would swoop in to pick up their overpriced shares at an even higher price. That's exactly the kind of bet that can turn you into the greatest of the idiots, depending on when the supply of bigger ones shuts off. It always does shut off. Just ask that man down the street hawking tulip bulbs, 10 for a dollar.

Thankfully, today's minibubbles seem to be limited to a few select equities where the new Young Turks who are once again proud to call themselves "traders" peer at charts like so many tea leaves, attempt to predict upcoming irrationality, and then brag about their success at the Yahoo! (NASDAQ:YHOO) finance message board.

Insanely overvalued by any metric, with no barriers to competition, Travelzoo looks like an ideal short candidate, except for the fact that a third of the float is already sold short. The recent pops look a lot like squeezes, so investors considering a bet against the stock should make sure they won't be hit with a margin call and forced to sell. This stock has wrecked plenty of pessimists, and it will continue to do so. But in the long run, the valuation will have to return to reality, and that means a big drop.

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Seth Jayson was always a wallflower, which is why, despite his silly crush on Travelzoo, he has no position in any company mentioned. View his Fool profile here.