DALLAS - Ashford Hospitality Trust, Inc. (NYSE: NYSE:AHT), a real estate investment trust, announced today that it has received a non-compliance notice from the New York Stock Exchange (NYSE) for not meeting the minimum average share price requirement. The NYSE mandates listed companies to maintain a minimum average closing share price of $1.00 over a consecutive 30 trading-day period.
In response to the notice received on September 23, 2024, Ashford (NYSE:AINC) Trust intends to notify the NYSE within the next 10 business days of its plan to implement a 1-for-10 reverse stock split. This action aims to bring the company back into compliance with the NYSE's requirements. Ashford Trust has a six-month period to regain compliance, which can be achieved if both the closing share price and the average closing share price over the preceding 30 trading days are at least $1.00 on the last trading day of any calendar month within this cure period.
The company believes that the reverse stock split will not only enable the continued trading of its common stock on the NYSE but also potentially increase the market price per share above the $5 threshold, which is often required by institutional investors to hold shares. Additionally, the reverse stock split could reduce the limitations and costs associated with margining a stock priced under $5 per share, thereby potentially attracting a broader range of long-term institutional investors, individual investors, and buy-side analysts.
During this period, Ashford Trust's common stock will remain listed and traded on the NYSE with the ticker symbol "AHT," but will include the designation ".BC" to indicate the company's current non-compliance with NYSE continued listing standards. The company's business operations and Securities and Exchange Commission reporting requirements remain unaffected by this notice, and it does not constitute a breach of the company's material debt obligations.
While Ashford Trust is taking steps to address the share price issue, it has stated that there can be no assurances that it will be able to satisfy the conditions for maintaining its NYSE listing.
This information is based on a press release statement from Ashford Hospitality Trust, Inc.
In other recent news, Ashford Hospitality Trust Inc . reported a net income of $44.3 million and adjusted funds from operations per diluted share of $0.27 in its second-quarter 2024 earnings call. The company also announced the exchange of approximately 135,002 shares of its Preferred Stock for roughly 2.46 million shares of Common Stock, a move aimed at capital restructuring. Furthermore, Ashford Hospitality Trust has amended its hotel management agreement with Remington Lodging & Hospitality, LLC, introducing a cap on the monthly Group Services fee charged per hotel room.
These recent developments also include the sale of seven assets for over $310 million and raising nearly $147 million through non-traded preferred stock offerings. The company also reported increases in comparable hotel revenue per available room, ancillary revenue, and group revenue pace.
In addition, Ashford Hospitality Trust continues to focus on its strategic initiatives, including guest room renovations and other projects planned for the latter part of the year. However, the company's focus remains on selling lower-end, non-core assets in the coming years, depending on market conditions. These updates reflect the company's ongoing efforts to manage costs more effectively and position itself for continued growth.
InvestingPro Insights
As Ashford Hospitality Trust, Inc. (NYSE: AHT) navigates through its current share price challenges, there are several financial metrics and analyst insights from InvestingPro that provide a broader perspective on the company's situation. With a market capitalization of approximately $45.9 million and a notably low price-to-earnings (P/E) ratio of 2.96, the company presents an interesting case for investors looking for potentially undervalued stocks.
One of the key InvestingPro Tips for Ashford Trust is that it is trading at a low revenue valuation multiple, which could suggest that the company's revenue is not being fully valued by the market. This tip is particularly relevant to investors who are evaluating the company's turnaround efforts and potential for future growth. Additionally, analysts predict that the company will be profitable this year, which may provide some optimism for investors concerned about the company's ability to maintain its NYSE listing. For more detailed analysis and additional InvestingPro Tips, investors can visit the dedicated page for Ashford Trust on InvestingPro.
Looking at the real-time data, Ashford Trust's gross profit margin over the last twelve months stands at 23.08%, which, while indicative of some operational efficiency, also highlights that the company suffers from weak gross profit margins relative to its peers. In terms of stock performance, the price has fallen significantly over the last year, with a 1 Year Price Total Return of -58.24%. This level of price volatility is consistent with another InvestingPro Tip, noting that the stock generally trades with high price volatility. Investors should consider these factors when assessing the risk and potential of investing in Ashford Trust.
It's worth noting that Ashford Trust does not pay a dividend to shareholders, which may influence the investment decisions of income-focused investors. For those interested in exploring further, InvestingPro offers a total of 16 tips for Ashford Trust, each providing unique insights into the company's financial health and market performance.
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