Ashford Hospitality Trust (AHT) has agreed to sell up to 40.1 million shares of common stock to Seven Knots, LLC. The par value of shares is $0.01 per share and they may be sold from time to time during the term of the purchase agreement.
Per the terms, the sale is to be completed over two years from the completion of all necessary formalities, including the filing of the final prospectus with the SEC. Additionally, Seven Knots is obligated to buy shares as Ashford directs.
Seven Knots will be obligated to purchase up to 350,000 shares on any trading day on which the closing sale price of the Common Stock is not below $1.00 per share on the NYSE. The upper limit on the value of shares that may be purchased has been fixed at $2 million.
Furthermore, the agreement allows for any adjustments to the maximum share amount and closing sale price for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split, or other similar transaction after the date of the repurchase agreement. (See Ashford stock chart on TipRanks)
On June 15, B. Riley Financial analyst Bryan Maher reiterated a Hold rating on the stock with a price target of $5. This implies 7.4% upside potential from current levels.
The analyst believes that as the economy recovers from COVID-19 impacts, real estate investment trusts are becoming more optimistic about current economic and business trends.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 1 Buy and 2 Holds. The average Ashford analyst price target of $4.67 implies 1.5% downside potential from current levels.
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