ASHFORD HOSPITALITY TRUST COMPLETES REVERSE STOCK SPLIT

Rhea-AI Summary

Ashford Hospitality Trust (NYSE: AHT) has completed a 1-for-10 reverse stock split effective October 25, 2024. The split reduced outstanding common shares from approximately 55.2 million to 5.5 million shares. Trading on a split-adjusted basis will commence on October 28, 2024, on the NYSE under the same symbol 'AHT' but with a new CUSIP number. The company also executed a similar 1-for-10 reverse split of Ashford Hospitality Partnership units, reducing them from 2.1 million to approximately 200,000 units.

Positive

• None.

Negative

• Implementation of reverse stock split indicates potential share price concerns
• Significant reduction in total outstanding shares may impact stock liquidity

Insights

Financial Analyst

The 1-for-10 reverse stock split is a significant technical move that typically signals financial distress. With a micro-cap valuation of just $30.4M and the stock trading well below NYSE's continued listing requirements, this appears to be a desperate attempt to maintain exchange listing and avoid delisting. The reduction from 55.2 million to 5.5 million shares artificially inflates the stock price without changing the underlying business fundamentals or market capitalization. Historical data shows reverse splits often precede further price declines, as they don't address core business challenges. For hotel REITs, maintaining NYSE listing is important for institutional investment and debt covenants. The simultaneous adjustment of partnership units indicates comprehensive capital structure realignment, but investors should be extremely cautious given the company's apparent financial difficulties.

DALLAS, Oct. 25, 2024 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") announced today that it completed a reverse split of the Company's common stock at a ratio of 1-for-10.

After the close of business on October 25, 2024, the effective date of the reverse stock split, each share of the Company's issued and outstanding common stock and equivalents was converted into 1/10th of a share of the Company's common stock. As a result of the reverse split, the number of outstanding shares of common stock was reduced from approximately 55.2 million shares to approximately 5.5 million shares. The reverse stock split will affect all stockholders proportionally and will not affect any stockholder's ownership percentage of shares of the Company's common stock, except for minor changes resulting from the payment of cash for fractional shares.

As of market open on October 28, 2024, the Company's common stock will commence trading on a split-adjusted basis on the New York Stock Exchange (the "NYSE"). The common stock will continue to trade on the NYSE under the symbol "AHT" but will trade under a new CUSIP number.

Ashford Trust's stockholders should contact their broker or Ashford Trust's transfer agent, Computershare, at (800) 546-5141, for any necessary assistance relating to the reverse stock split.

On October 25, 2024, the Company also completed a reverse split of the partnership units of Ashford Hospitality Limited Partnership, the Company's operating partnership ("Ashford Trust OP"), at a ratio of 1-for-10. As a result of such reverse split, the number of outstanding partnership units of Ashford Trust OP was reduced from approximately 2.1 million units to approximately 200,000 units.

Ashford Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.

Forward-Looking Statements

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the federal securities regulations. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature: our business and investment strategy; anticipated or expected purchases, sales or dispositions of assets; our projected operating results; completion of any pending transactions; our plan to pay off strategic financing; our ability to restructure existing property-level indebtedness; our ability to secure additional financing to enable us to operate our business; our understanding of our competition; projected capital expenditures; the impact of technology on our operations and business; the risk that the notice and noncompliance with NYSE continued listing standards may impact the Company's results of operations, business operations and reputation and the trading prices and volatility of the Company's common stock; and the Company's ability to regain compliance with the NYSE continued listing standards. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. These and other risk factors are more fully discussed in the Company's filings with the SEC.

The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise except to the extent required by law.

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SOURCE Ashford Hospitality Trust, Inc.

FAQ

What is the reverse stock split ratio announced by Ashford Hospitality Trust (AHT)?

Ashford Hospitality Trust announced a 1-for-10 reverse stock split, effective October 25, 2024.

How many shares of AHT are outstanding after the reverse split?

After the reverse split, AHT's outstanding common shares were reduced from approximately 55.2 million to 5.5 million shares.

When will AHT begin trading on a split-adjusted basis?

AHT will commence trading on a split-adjusted basis on the NYSE on October 28, 2024.

How does the reverse split affect AHT stockholders' ownership percentages?

The reverse split does not affect stockholders' ownership percentages, except for minor changes from cash payments for fractional shares.