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Hersha Hospitality Trust Message Board

  • software3758 software3758 Aug 5, 2009 9:16 AM Flag

    Big Improvement

    Earnings report is a big improvement over Q1. IMO, the key number is Funds From Operations (FFO) which came at $14m for the quarter vs $1m for Q1. That would put the current stock price at less than 3 times FFO which I would hope investors would see as a good value. This should only increase in future quarters as the economy gets moving again.

    The bad news was the cheap stock and warrants sold to the Argentinian group. I don't understand the purpose behind that unless they needed some quick cash to pay debt or hold the dividend.

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    • I agree with you... selling stock at below market price to an investor group was really dopey. Those investors basically can short the stock at 2.7* and cover with shares they purchase at $2.50. This arb trade is going to make them $ that comes outta our hides.
      My take on this is that earnings is not equal to cash - so while they report more earnings, that does not translate into cash on the ground needed to pay for debt service, etc. They SHOULD have totally cut dividends and NOT sold that stock to the Argentinians at dirt cheap prices... BONEHEADED move by mgmt!

 
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