Shares of the Dallas company were falling nearly 16% to $15.29 on Monday.
Ashford Hospitality said that as a result of the reverse split the number of outstanding common shares was reduced to roughly 26.5 million shares from about 265.1 million shares.
By implementing a reverse stock split, the company and its board believe they "can realize increased incremental demand for both its common stock and its options while also making the company's shares more attractive to a broader range of potential long-term institutional investors, individual investors, and buy-side analysts," Ashford Hospitality said in a statement.
The company said it also completed a reverse split of the
partnership units of its operating partnership Ashford Hospitality Limited Partnership at a ratio of 1-for-10.
As a result, the number of outstanding partnership units of
Ashford Trust OP was reduced from about 4 million units to roughly 402,222 units.
Earlier this month, the company estimated that second-quarter revenue per available room declined 46% from the second quarter of 2019, the year before the COVID pandemic, and more than quadrupled (up 372%) from the second quarter of 2020, as the pandemic raged.
The improved preliminary revPAR results for the quarter "are driven by pent-up leisure demand," said Rob Hays, Ashford's chief executive.
Hays said at the time that the reverse split "is another important step for the company and its stockholders to optimize our position."
"The company is committed to make owning Ashford Trust's common stock as shareholder friendly as possible," he said.