DALLAS - Ashford Hospitality Trust, Inc. (NYSE: NYSE:AHT), a real estate investment trust, has completed a reverse stock split of its common shares at a 1-for-10 ratio, effective after the market closed on Friday. The action has reduced the number of outstanding shares from roughly 55.2 million to approximately 5.5 million. The reverse split is designed to proportionally affect all shareholders without significantly altering ownership percentages, barring minor adjustments due to cash payouts for fractional shares.
Starting from the market open on October 28, 2024, Ashford (NYSE:AINC) Trust's common stock will be traded on the New York Stock Exchange under the existing ticker symbol "AHT" but with a new CUSIP number. The reverse split also applies to the partnership units of Ashford Hospitality Limited Partnership, the operating partnership of the Company, where outstanding units have decreased from about 2.1 million to 200,000 units.
Shareholders may require assistance with the reverse split process and are advised to contact their brokers or Ashford Trust's transfer agent, Computershare. This reverse stock split follows the Company's compliance with NYSE continued listing standards.
Ashford Trust specializes in upper upscale, full-service hotel investments. The press release also contained forward-looking statements regarding the Company's business and investment strategy, anticipated transactions, and operational plans. These statements are based on current expectations and may change due to various factors. The Company has stated that it does not have an obligation to update these forward-looking statements except as required by law.
This news article is based on a press release statement from Ashford Hospitality Trust, Inc.
In other recent news, Ashford Hospitality Trust has been active with several significant developments. The company has disclosed a new compensatory arrangement for its President and CEO, Stephen Zsigray, which includes a deferred cash award and a stock grant. In another development, Ashford Trust has approved a 1-for-10 reverse stock split to ensure compliance with the NYSE's minimum continued listing requirement.
The company also reported a slight decrease in revenue per available room (RevPAR) for the third quarter of 2024, alongside a net income of $44.3 million and adjusted funds from operations per diluted share of $0.27 in the second quarter. Ashford Trust has raised approximately $167 million through Non-Traded Preferred Equity offerings.
In an effort to manage costs more effectively, Ashford Hospitality Trust has amended its hotel management agreement with Remington Lodging & Hospitality, introducing a cap on the monthly Group Services fee charged per hotel room. The company also exchanged roughly 135,002 shares of its Preferred Stock for about 2.46 million shares of Common Stock, a strategic move for capital restructuring.
Among other recent developments, Ashford Trust sold seven assets for over $310 million, and raised nearly $147 million through non-traded preferred stock offerings. These are the recent developments in Ashford Hospitality Trust's ongoing efforts to position itself for continued growth.
InvestingPro Insights
Ashford Hospitality Trust's recent reverse stock split comes at a time when the company is facing significant market challenges. According to InvestingPro data, AHT's stock has experienced a substantial decline, with a 74.07% drop in the past year and a 71.66% decrease year-to-date. This context underscores the company's motivation for implementing the reverse split to maintain NYSE listing compliance.
Despite these headwinds, InvestingPro Tips suggest that AHT's net income is expected to grow this year, and analysts anticipate the company will be profitable. This positive outlook is supported by the company's current P/E ratio of 1.89, indicating that it's trading at a low earnings multiple relative to its peers in the REIT sector.
However, investors should note that AHT's revenue growth has been negative, with a 4.98% decline in the last twelve months and a more pronounced 15.78% drop in the most recent quarter. This aligns with the InvestingPro Tip indicating that analysts anticipate a sales decline in the current year.
For those considering AHT's potential, it's worth noting that the stock's RSI suggests it may be in oversold territory, potentially presenting a value opportunity for contrarian investors. Additionally, AHT's liquid assets exceed short-term obligations, which could provide some financial flexibility as the company navigates its challenges.
InvestingPro offers 18 additional tips for AHT, providing a more comprehensive analysis for investors looking to deepen their understanding of the company's financial position and market performance.
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