Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

A Puzzling 15mm Share Issuance Sends Summit Hotels Plunging

Today, 9/13/13 Summit Hotels (NYSE:INN) has dropped 6.7% consequent to a rather perplexing issuance of 15mm shares. This article will examine the offering and where INN stands at its newly discounted price. Specifically, we will identify the superficial analysis that has led to the sell-off and demonstrate INN to be a strong investment at its discounted price.

The Details of the Offering

15mm shares are being offered at $9.20 per share for net proceeds of $132.3mm. An additional 2.25mm may be issued at underwriters option. Given that INN had around 66mm shares outstanding, this offering is quite substantial as it increases share count by 22.7%-26% (pending on fulfillment of underwriters option). Needless to say, understanding the enormous impact...

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