After surging by 14.97% to $5.67, Ashford Hospitality Trust, Inc (NYSE: AHT) stock declined marginally to $4.97 on June 4, 2021.
The stock already gained 62.5% in the past weeks and expects a correction. According to a filing on June 1, 2021, the company exchanged 849,440 shares of its preferred stock for its newly offered 7.540 million shares during May 9 and May 28, 2021.
The exchange reduces expenses for the company since the cost of preferred stock is higher. It provided a catalyst for Ashford stock to gain significantly in the past few weeks.
Ashford reported a loss of $0.30/share in the quarter. Its funds from operations are surged by 60% in the quarter.
Ashford posted $115.83 million in Q1 2021 revenues. These results have exceeded Zacks Consensus Estimate by 1.20% and propelled the stock upwards.
It maintains a cash balance and CE (Cash Equivalents) of $225.4 million at the end of Q1 2021. The company also maintains $67.7 million as restricted cash, which is manager-held and lender-held reserves.
Its receivables from third-party managers at the end of Q1 2021 are $11.8 million.
Raises $200 million
The company raised $200 million from Oaktree (Oaktree Capital Management, L.P.) on January 25, 2021. It has an option to increase the loan to $450 million.
The real estate investment trust – Ashford invests mainly in full-service and upscale hotels.
Ashford would use the proceeds to benefit from the recovering hospitality industry. Its CEO, J. Robison Hays, said the company achieved great success in its forbearance efforts. The company would put in significant efforts to optimize its properties and improve financial and operational capability.
Robison said the company would work with the best institutional partner – Oaktree, for its future endeavors.
Ashford is facing rough weather despite the economy opens up gradually after the COVID-19 pandemic. The US is vaccinating its population on priority and at a fast pace.
Ashford mainly focuses on the lodging industry. It holds several hotels in the resort, secondary, and primary markets across the US.