DALLAS, July 2, 2021 /PRNewswire/ -- Ashford
Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the
"Company") announced today that its Board of Directors unanimously
approved a reverse split of the Company's common stock at a ratio
of 1-for-10.
As of the effective date of the reverse split, each share of the
Company's issued and outstanding common stock will be automatically
converted into 1/10th of a share of the Company's common stock. The
reverse stock split will become effective as of the close of
business on July 16, 2021, and the
common stock is anticipated to commence trading on the New York
Stock Exchange on July 19, 2021 on
the split-adjusted basis. The foregoing actions have been approved
by the Company's Board of Directors pursuant to the Maryland
General Corporation Law and no stockholder approval is
required.
"The Company is committed to making owning Ashford Trust's
common stock as shareholder friendly as possible, and we believe
implementing a reverse stock split is another important step for
the Company and its stockholders to optimize our position,"
commented Rob Hays, Ashford Trust's
President and Chief Executive Officer.
The Company believes the reverse stock split will benefit all
shareholders by addressing several items impacting its common stock
and options:
- The reverse split will meaningfully increase AHT's market price
per share above the $5 per share
threshold required by many institutions to hold shares.
- Some brokers limit the ability or increase the cost to margin a
stock under $5 per share.
- Having option strike increments of 50% of the stock price
(i.e., $2.50 on a $5 stock) has made option trading on AHT shares
less attractive due to limited applicable strike prices.
- There are high transaction costs as a percentage of AHT's stock
price commissions. Commissions are typically calculated on the
number of shares/options rather than dollar value and even the
"zero commission" brokerages still charge per-contract fees on
options. The reverse split may reduce per-share and per-contract
commissions and fees by as much as 90% for the same dollar
value transaction.
By implementing a reverse stock split, the Company and its Board
of Directors believes it can realize increased incremental demand
for both its common stock and its options while also making AHT's
shares more attractive to a broader range of potential long-term
institutional investors, individual investors, and buy-side
analysts.
This action is in addition to Ashford Trust recently being added
to the Russell 2000®, Russell 3000®, and Russell Microcap® indexes
-- which created added exposure to key institutional investors as
well as to investors who use the Russell indexes to benchmark their
portfolio.
No fractional shares of common stock will be issued as a result
of the reverse stock split. Instead, any fractional shares
resulting from the reverse stock split will be rounded down to the
nearest full share, sold in the open market and the proceeds from
such sales will be distributed to the applicable stockholder in
cash. In addition, the common stock will trade under a new CUSIP
number. 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. 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.
The Company also intends to effect 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, effective July 16,
2021.
* * * * *
Ashford Hospitality Trust is a real estate investment trust
(REIT) focused on investing predominantly in upper upscale,
full-service hotels.
Follow CEO Rob Hays on Twitter at
https://twitter.com/aht_rob or @aht_rob.
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 Private
Securities Litigation Reform Act of 1995. Forward-looking
statements in this press release include, among others, statements
about the Company's strategy and future plans. These
forward-looking statements are subject to risks and uncertainties.
When we use the words "will likely result," "may," "anticipate,"
"estimate," "should," "expect," "believe," "intend," or similar
expressions, we intend to identify forward-looking statements. Such
statements are subject to numerous assumptions and uncertainties,
many of which are outside Ashford Trust's control.
These forward-looking statements are subject to known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated, including, without
limitation: the impact of COVID-19, and the rate of adoption and
efficacy of vaccines to prevent COVID-19, on our business and
investment strategy; the timing and outcome of the Securities and
Exchange Commission's investigation; our ability to regain S-3
eligibility; our ability to repay, refinance or restructure our
debt and the debt of certain of our subsidiaries; anticipated or
expected purchases or sales of assets; our projected operating
results; completion of any pending transactions; our understanding
of our competition; market trends; projected capital expenditures;
the impact of technology on our operations and business; general
volatility of the capital markets and the market price of our
common stock and preferred stock; availability, terms and
deployment of capital; availability of qualified personnel; changes
in our industry and the markets in which we operate, interest rates
or the general economy; and the degree and nature of our
competition. These and other risk factors are more fully discussed
in Ashford Trust's filings with the Securities and Exchange
Commission.
The forward-looking statements included in this press release
are only made as of the date of this press release. 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. Investors should not place undue reliance on these
forward-looking statements. The Company can give no assurance that
these forward-looking statements will be attained or that any
deviation will not occur. 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.