Ashford Hospitality Trust, Inc. (NYSE: AHT) is the real estate investment trust (REIT) that focuses mainly on full-service, upscale hotels. The REIT recently announced that it is going for a reverse split of the common stock with a 1:10 ratio. From the date of reverse split effectiveness, the company’s issued or outstanding share shall be converted to 1/10th of the company’s common stock. The reverse split is to come into effect on July 16, 2021. Based on split adjustment, the company’s common stock will start trading on NYSE from July 19 onwards. Any further actions are to be pre-approved by the Board of Directors of Ashford as per the Maryland General Corporation Law.
What’s next?
The President and CEO of the company, Rob Hays, said that Ashford’s common stock reverse split is shareholder-friendly. He added that the implementation of this stock is crucial for the optimization of stockholders’ positions. The company further added that the reverse split is expected to benefit shareholders when various items that affect options and common stock are addressed.
Now what?
The reverse split is expected to increase the price of AHT’s share, pushing it above $5. In addition, the implementation of a reverse stock split is expected to realize the increased incremental demand for AHT’s options and common stock. This will make AHT’s shares more attractive to buy-side analysts, individual investors, and institutional investors who go for the long haul.
The reverse stock split follows Ashford Trust’s recent addition to Russell Microcap®, Russell 3000®, and Russell 2000® indexes. This addition has created an additional exposure to those investors and institutional investors who use Russell indexes for portfolio benchmarking. Additionally, AHT is also planning to effect the reverse split of its partnership units in Ashford Hospitality Limited Partnership in the 1:10 ratio from July 16, 2021.