Alibaba Group Holding Limited (NYSE:BABA) surges 3.0%; individual investors who own 41% shares profited along with institutions
Key Insights
Significant control over Alibaba Group Holding by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 25 investors have a majority stake in the company with 38% ownership
Every investor in Alibaba Group Holding Limited (NYSE:BABA) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 3.0% increase in the stock price last week, individual investors profited the most, but institutions who own 41% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Alibaba Group Holding.
View our latest analysis for Alibaba Group Holding
What Does The Institutional Ownership Tell Us About Alibaba Group Holding?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Alibaba Group Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Alibaba Group Holding's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Alibaba Group Holding. SoftBank Group Corp. is currently the largest shareholder, with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.4% and 3.0%, of the shares outstanding, respectively.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Alibaba Group Holding
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own some shares in Alibaba Group Holding Limited. It is a very large company, and board members collectively own US$8.8b worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 41% stake in Alibaba Group Holding. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Public Company Ownership
Public companies currently own 14% of Alibaba Group Holding stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Alibaba Group Holding better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Alibaba Group Holding .
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.