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Sotherly Hotels (NASDAQ:SOHO) Inc., a real estate investment trust with a market capitalization of $16.78 million, received a deficiency notice from The Nasdaq Stock Market LLC on Monday, warning that the company's stock price has not met the minimum bid requirement for continued listing on The Nasdaq Global Market. Currently trading at $0.85, down about 31% over the past six months, the company's common stock has closed below the required $1.00 per share for the last 30 consecutive business days, violating Nasdaq's Listing Rule 5450(a)(1). According to InvestingPro analysis, the stock appears undervalued despite its recent challenges.
Despite the notice, Sotherly Hotels' stock will continue to trade on the Nasdaq under the ticker symbol "SOHO." The company has until August 11, 2025, to regain compliance by ensuring its common stock's bid price closes at $1.00 per share or higher for at least 10 consecutive business days. InvestingPro subscribers can access 11 additional key insights about SOHO's financial health, which currently rates as GOOD despite recent price challenges.
If compliance is not achieved by the deadline, Sotherly Hotels may have the opportunity to secure an additional 180 days to meet the requirements by transitioning to The Nasdaq Capital Market, provided it meets all other listing criteria except for the minimum bid price.
Failure to comply within this extended period could lead to delisting, although the company would have the right to appeal the decision. During the appeal process, the company's stock would remain listed on Nasdaq.
The forward-looking statements included in the 8-K filing caution that these plans are subject to risks and uncertainties that could affect the company's ability to meet Nasdaq's requirements.
This news is based on a press release statement and does not include any assumptions or predictions by the author.
In other recent news, Soho House & Co experienced a surge in stock after Third Point, an activist hedge fund, disclosed a 9.9% stake in the hospitality company. This development coincides with substantial corporate activities, including an acquisition offer from a third-party consortium at $9.00 per share, supported by Executive Chairman Ron Burkle and The Yucaipa Companies, provided they roll over their equity interests.
Third Point's CEO, Daniel S. Loeb, expressed criticism towards the Board's handling of the sale process, suggesting that the current deal does not maximize shareholder value. Loeb proposed that the Board consider external bids, asserting that other parties with hospitality industry experience could offer a superior price.
In response to these recent developments, the Board formed a Special Committee to evaluate the offer. However, the company has not guaranteed a transaction or a change in strategy and will not comment further until a specific transaction is approved or its review concludes.
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