Editor's note: A previous version of this article included incorrectly referred to Ashford Hospitality Prime as if it were Ashford Hospitality Trust. The author and The Motley Fool regret the error.
What happened
Shares of Ashford Hospitality Prime, Inc. (NYSE: AHP) are down about 10% today after the company priced a secondary offering at $12.15 per share.
So what
Ashford Hospitality Prime is looking for some extra cash. The company announced that a secondary offering of 5.75 million shares priced at $12.15 per share. Underwriters also have the option to sell an additional 862,500 shares at the same price within 30 days. It is also in the market to float an additional 1.15 million Series B preferred shares, which yield 5.5% at par.
Image source: Getty Images.
Now what
On March 1, 2017, the company announced it entered an agreement to acquire an 80-room hotel in Yountville , CA for $96.5 million. It also announced that it signed a non-binding letter of intent to acquire an unidentified luxury resort for $150 million.
Ashford Hospitality Prime apparently sees opportunity to raise capital to make accretive acquisitions. Shareholders aren't so sure, selling off shares to $11.50 at noon on Thursday, March 2, below the public offering price of $12.15 per share.
