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Hersha Hospitality Trust Message Board

  • jgtaylo77 jgtaylo77 Oct 4, 2010 3:06 PM Flag

    Who Owns Hersha

    I'm not sure what title Jay Shah has but I presume that he is still the CEO. As of August,2009 HT went looking for some cash and found Eduardo Elzstain, an Argentenian investor. HT made him a "deal" of some 12-13M shares 6M at $2.50 and 6M at $3.00(option). Eduardo liked the price and even bought additional shares as the opportunity arose. He even bought at the last offering at $4.25. I think the REIT rules limit Eduardo to 10% and he is currently listed (Yahoo insider) as having 15M shares. Mr Shah, HTs CEO believes in this company to the tune of 750k shares, or 1/2% of the outstanding shares.
    The board was responsible for taking HT from a great growth opportunity for shareholders to 1/3 or less of that opportunity i.e. from 48M shares to 148M shares. In addition, HTs newly minted 100M shares were sold mostly (75%) at $3. I guess Mr. Shah plans to benefit from HT in some manner that isn't being a shareholder. The decisions over the last year with the equity raises have made that crystal clear.
    That is why this message board is one of the Saharas of the hotel REITS. I can't believe I still have a few hundred shares left here. Oh by the way , Eduardo is selling some of his shares for profit.
    My bets are principally with AHT and MDH whose CEO and friends and family have significant investment in the companies they manage. AHT has made some very good decisions and have re-purchased shares (60% of the outstanding shares, 125M to 50M) Halleluyah! MDH did a rights offering but refuses to do an equity raise at current share price. A little cash is needed to get MDH on more solid ground.
    GLTA, jtaylor
    PS I don't think the improvement in NY and the East, AS GOOD AS IT IS, can overcome the dilution.

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    • I bought stock in HT years back, during the crash...around $1.25 I believe....But now, I've sold it and am playing some more depressed stocks that have not "made the move up" yet.

      SPPR is a limited service hotel REIT like HT...But as yet, has not made the same big gains off the bottom...I liked SPPR for it's low "price-to-book"...Also liked AHT / HPT / RAS...They've moved well over the past year or so....But SPPR seems to be a sleeper...with much better pricing on the "tangibles"....cheap.

      I'd imagine that when they go "green" on their net earnings sometime in 2011, and begin paying a dividend again, the shares should pop back up (looking for $2+ in 2011 / $4 by end-of-2012)...

      But right now, the "price-to-book" is way way below the SECTOR AVERAGE....Interesting one (and reminds me a lot of HT, when I got that one years ago...so, I expect the same sort of 'recovery' on the pricing, at some point....UNDER THE RADAR, FOR SURE...JUST NOT "FOLLOWED" YET.)

    • Elzstain owns about 12-15 times the number of shares as the entire Shah family. Not much investment in HT by the Shah family. HT virgins beware of those who tout HT based on the improving NY and NE market. The cheap dilution of the common shareholders will have a lasting influence on the performance of this REIT.
      jtaylor

      • 1 Reply to jgtaylo77
      • JGT,
        I still own several thousand shares of this stock purchased in the 1.XX range (see my earlier posts). I agree with you that the recent dilutions were steep. However, if the money was (is) used for acquiring the right properties given depressed commercial real estate prices, I would argue that there is some upside to the dilution. I would also suggest that since Eduardo still owns a chunk of shares in this firm, he is not going to sit back and watch the Shahs drain the juice out of HT. Remember he bought a chunk of shares at $5.80 (I think!)... Nonetheless, I would watch Eduardo's trades very carefully!! If he jumps ship and sells out, then HT stockholders better jump along!!!!

        What I am most upset with currently is that while FFO is up (more than I expected!), HT management have not come out and said concretely what they will do with the money raised and the $ from new credit line that they arranged for. They should be more communicative instead of treating stockholders as children. That being said, I am looking for a price target of $8 by Dec if not earlier. So, I do believe that there is some upside here that will show up ... and sooner if the Shahs would be more communicative!!!!

 
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