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Supertel no longer at risk of Nasdaq delisting
February 27 2012

The $30-million investment in Supertel Hospitality by an Argentinean real-estate company has pushed Supertel’s stock over $1 per share, and the company is no longer in violation of Nasdaq’s minimum closing bid price rule.

Highlights
  • Supertel Hospitality received a Nasdaq notice in September that the real-estate investment trust’s stock price had closed below $1 per share for 30 consecutive days, a violation of Nasdaq listing requirements.
  • “We believe the IRSA investment was clearly the most important contributing factor in the recent price increase of our common and preferred stock,” Kelly A. Walters, Supertel’s president and CEO, said in an email.
  • Supertel is embarking on a new strategy of buying midscale and upper-midscale properties.

NORFOLK, Nebraska—The investment in Supertel Hospitality by an Argentinean real-estate company has lifted Supertel’s stock back above the $1 per share threshold and out of danger of a Nasdaq delisting.

Supertel in September received a notice from Nasdaq that its stock price closed below $1 per share for 30 consecutive days, a violation of listing requirements.

But after its stock price closed above $1 for 10 consecutive business days earlier this month, the real-estate investment trust was informed by Nasdaq it was no longer in violation of the minimum closing bid price rule. 

One factor in lifting the stock was the $30-million investment made in the company by Real Estate Strategies LP, an investment arm of Inversiones y Representaciones Sociedad Anónima. The deal was approved by Supertel’s shareholders in January. IRSA now owns 34% of Supertel.

“We believe the IRSA investment was clearly the most important contributing factor in the recent price increase of our common and preferred stock,” Supertel’s president and CEO Kelly A. Walters said via email. “IRSA is widely respected in the capital markets for their investment acumen and track record of success, and we believe that some of the interest in the stock following the transaction’s closing was a function of investors seeking to coattail on IRSA’s ideas.”

Supertel’s stock this month reached a high at close of $1.31 per share on 14 February. The stock’s 52-week high is $1.88 per share. The company’s stock price closed Friday at $1.03 per share.

Walters added: “We believe that over the long run the stock price is a byproduct of how well the organization is being managed, so our focus is on the company—not the share price. The market will place the proper valuation on the company’s shares once we have achieved the full benefit of our turn-around plan.”

Supertel is embarking on a new strategy of buying midscale and upper-midscale properties. Supertel historically has been an acquirer of economy hotels. During the past three years, the REIT has sold approximately 25 hotels and now has 99 properties in its portfolio.

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