management is not totally incompetent. Maybe they are trying to make this look as bad as possible so they can take it private or do a leveraged buyout at a cheap price? I have no idea if this is true, and it is pure speculation on my part, but it is one of the only reasons I can come up with for this complete lack of performance and bad execution. Why else would they be running up expenses, failing to execute on selling existing properties and failing to communicate any type of definite plan to turn this thing around? Any other ideas out there? Disclosure: I am long 12000 + shares. No volume yet this morning but I see a bid on level two for 10,000 shares at .78 so this is better than i thought it would be.
I started buying SPPR when they first fell below a buck two years ago thinking that travelers would opt for less expensive lodgings through the recession. So much for those thoughts.... Most hospitality REITs are suffering and just hanging on as they sell off and downsize. My main concern with SPPR is the possible delisting from NASDAQ. The SEC has relaxed delisting as so many companies are in the red and can get extensions for a year. Going to the Pinksheets puts companies in the wild west of investing and leaves shareholders in total darkness. We don't want to go there. SPPR is more of a gamble than ever, but I am going to continue to hold and maybe even buy a bit more on the dips. It seems to be a fairly well run company but is at the mercy of difficult economic times. Another hospitality I have been buying is Pebblebrook, PEB. It is a different animal, buying up distressed four star properties managing to keep high occupancy rates and low debt. The pps is not growing but as all profits are put back into acquisitions but the future looks good.
Ok, i was being somewhat faceitous in my last post about managements motives. but i still cant figure out why they would be jacking up overhead when sales are declining. If they could get rid of the "for sale" properties they might have a chance at profitablity with continuing operations but only if they reduce overhead. They dont really have any recognizable brand but rely on underlying brands of the franchised hotels. The only thing they can do is get their financing and portfolio in place and have competent managers running the properties at best possible cost/benefit ratio. I am hanging on based purely on underlying asset value and potential for turn around. at this point no use in selling.