Author Topic: TZOO - Travelzoo  (Read 1836 times)

keerthiprasad

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Re: TZOO - Travelzoo
« Reply #10 on: June 28, 2020, 09:44:35 AM »
The business held up better than I expected in Q1. 

A few happenings:
Cut $1M in expenses temporarily in Q1.
Shift to flexible deals/vouchers seems to be working with increasing month to month sales.
$24M cash position expected at end of Q2.
Jacks USA being marketed to members Q2.
Tzoo being dropped from Russell 2000 - reconstitution appears to be putting pressure on the price?


jasonchin

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Re: TZOO - Travelzoo
« Reply #11 on: June 29, 2020, 04:23:24 PM »
My 2 cents on the stock:

- Business model is different to Expedia whereby they don't take inventory risk (and more importantly, being independent aligns their interest to the consumers)
- Historically, bargain hunt deals do well post-crisis (as people will still try, however, look for deals)
- Like keerthiprasad mentioned, TZOO has the flexibility to cater deals for inventory (important as we return to a new normal)
- Catering for market by offering free cancellation (they only pay the supplier once the service is used)
- The royalty from Japanese business is currently unknown, however, it's like a call.
- Jack the flight club is a subscription business (and may attract high multiple as mentioned by members of CoBF)

Side note:
- Google explored this space previously and exited, so there is some resilience in their model currently
- Different from Groupon whereby you don't purchase directly from them. You don't have the hassle of showing the voucher on arrival and all of that
- Note that they only own 60% of Jack with the option of purchasing the remainder (not sure if Jack himself will still be involved in the business)

Reservation:
- Travelzoo Asia repurchase was value destruction for shareholders
- Removal of previous CEO and named founder's brother as CEO (Not sure how to view this - it's a family-run business with a minimum ownership)