It's official: The lunatic fringe has clearly gotten loose. There really is no other way to explain what's going on with shares at online travel company Travelzoo (NASDAQ:TZOO). Travelzoo's stock is up nearly 600% on the year, which is well and fine -- some companies simply find their grooves in a year and never look back. Think Qualcomm (NASDAQ:QCOM) in 1999: The rapid rise was way, way overdone, but the basic case for optimism on the company was absolutely, positively accurate. But Qualcomm had a patent-protected toll collector for a rapidly changing and growing technology. Travelzoo, on the other hand, is a travel fare aggregator. It provides nothing that several better-heeled companies, such as Yahoo! (NASDAQ:YHOO) or InterActive Corp (NASDAQ:IACI), for example, wouldn't be able to provide.

In this way, if you really, really want to pick out a model for Travelzoo -- what it hopes to be -- look no further than Amazon.com (NASDAQ:AMZN), a company that had no competitive advantage whatsoever but became the default destination for millions of people shopping online for its product. That's the hope -- Amazon, not Books-A-Million (NASDAQ:BAMM).

None of this, of course, matters as far as Travelzoo's stock is concerned at the moment. It doesn't matter whether this company sells flights, rocks, or doilies. What matters is that its tiny float and big short interest have run the stock up to the stars, completely unrelated to any particular aspirations that the company has to perform one way or another. Companies become unhinged all the time, both to the upside and the downside. Anyone remember Internet Capital Group (NASDAQ:ICGE) in 1999? The reasons given for the stock's stunning performance were things like "it's a zaibatsu," or "the sum of the parts is greater than the parts." Not great reasons, but at least there were reasons. Travelzoo went up nearly 28% in a single day based on nothing whatsoever.

Check this out:

  • Travelzoo has a float (the number of tradable shares) of 1.9 million, yet in the last three weeks, or 13 trading sessions, the number of shares traded has exceeded 100% of the float 10 times. This means that the average holding period for a Travelzoo share can be measured not in years or months, but in minutes.

  • Travelzoo's shares trade at a price-to-earnings ratio of 328. If you just take the most recent quarter and extrapolate it across the next year, it comes down to 168. Price-to-free cash flow isn't much better.

  • Travelzoo's price-to-book ratio exceeds 100.

You know what, I could go on, but it doesn't really matter that much. The first item is what is important here. People are just trading this low-float stock, carrying it ever higher. Maybe the short sellers are rushing for the exits, causing the shares to rise; I would imagine that has a part in it. The fundamentals don't matter here, which means only one thing: When they do matter once again, this will end very, very badly.

Once a company's stock comes unhinged from its underlying business, there's no telling how high it can go. But it will come back to reality -- they always do. If you're looking at it in the meantime and fearing that you've missed out, just think of these four words: Mad Hatter's Tea Party. That's what's going on here. Nothing more.

Bill Mann owns none of the companies mentioned in this story.