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Ashford Hospitality Trust, Inc. Message Board

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  • run35ok run35ok Jan 8, 2009 10:59 AM Flag

    Motivation for Bashers??

    <<On that screen it will show you that in the last year AHT never got over $7.50. When AHT was trading at 12 a share was back in 7/2007.>>

    $7.50/$12, what's the difference. The stock went to the sewers.

    You don't understand that the losses they may incur in these mezzanine, flooridor or whatever you call loans may come to bite them in the A$$. They put their backs to the wall when they maxed out on the LOCs. If covenants or balance sheet rules require them to offset these losses they have no other source but to float more shares. That's why the divy was omitted and that's why they are tightening their belts, hoping to weather the perfect storm. You may not see a dividend on the common for a very long time. Don't be surprised to see the common to 200MM in the near future. And that's why the price is in the gutter, plain and simple. I was lucky. I stepped in at the bottom in a small way.

    And they called it good management!!

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    • Once again you open your mouth before looking. First this a REIT, which means they invest in real estate. Part of the investment strategy is to make loans on real estate (ie primary holder to mezzanine loans). Now this is what investment people call RISK. There is a chance these loans might default. That is why these loans carry a higher interest rate, (Risk and reward remember that from finance 101,I feel I’m explaining this to my kids).
      As far as their debt goes, could you imagine what the price of this stock would be if they didn’t have any debt. In addition, REIT are known for have more leverage than other companies. In fact, I don’t know any REITS that are not highly leveraged. Also, why would you invest in a stock which you believe management does a terrible job? I think GM and SHLD have bad management but you don’t see me buying their stock.

      • 1 Reply to steveinhershey
      • Steveninhers, with all due respect you should take a course in risk mitigation 101.

        You don't gamble your $$ on risky loans, when you don't even have cash reserves to run your own operation. That's why they ended up maxing out their LOCs in order to just stay alive. God help them if these potential losses trigger other cash requirements.

        They weren't very proud of their mistakes until somebody from this board caught it in a footnote in one of their SEC releases. Then the whole mess came out.

        I am not a basher. I am only commenting on the quality of management at AHT.

        And they called this good management!!

    • "$7.50/$12, what's the difference. The stock went to the sewers."

      $4.50 is the difference.

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