Ashford Hospitality Trust (AHT) – Get Report fell just days after the hotel-focused real estate investment trust announced it had completed a 1-for-10 reverse split of the company’s stock.
Shares of the Dallas company fell nearly 16% to $15.29 Monday.
Ashford Hospitality said that as a result of the reverse demerger, the number of common shares outstanding was reduced to approximately 26.5 million shares from approximately 265.1 million shares.
By implementing a reverse stock split, the company and its board of directors believe they can “realize greater incremental demand for both the common stock and the options while making the company’s stock more attractive to a wider range of potential institutional investors.” long-term investors, individual investors, and buy-side analysts,” Ashford Hospitality said in a statement.
The company said it is also doing a reverse split of the
partnership units of its operating partnership Ashford Hospitality Limited Partnership in a 1-to-10 ratio.
As a result, the number of outstanding partnership units from
Ashford Trust OP was reduced from approximately 4 million units to approximately 402,222 units.
Earlier this month, the company estimated that Q2 revenue per available room fell 46% from Q2 2019, the year before the COVID pandemic, and more than quadrupled (up 372%) from Q2. of the second quarter of 2020 as the pandemic raged.
The improved preliminary revPAR results for the quarter are “driven by pent-up leisure demand,” said Rob Hays, Ashford’s chief executive.
Hays said at the time that the reverse split is “another important step for the company and its shareholders to optimize our position.”
“The company is committed to making ownership of Ashford Trust’s common stock as shareholder-friendly as possible,” he said.