CEO Puthugramam Chidambaran, iLearningEngines, Inc.'s (NASDAQ:AILE) largest shareholder sees value of holdings go down 24% after recent drop
Key Insights
Significant insider control over iLearningEngines implies vested interests in company growth
Puthugramam Chidambaran owns 69% of the company
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in iLearningEngines, Inc. (NASDAQ:AILE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And following last week's 24% decline in share price, insiders suffered the most losses.
In the chart below, we zoom in on the different ownership groups of iLearningEngines.
Check out our latest analysis for iLearningEngines
What Does The Institutional Ownership Tell Us About iLearningEngines?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
iLearningEngines already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 iLearningEngines' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in iLearningEngines. Looking at our data, we can see that the largest shareholder is the CEO Puthugramam Chidambaran with 69% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Arrowroot Capital Management, LLC is the second largest shareholder owning 5.0% of common stock, and Bruce Mehlman holds about 0.9% of the company stock. Interestingly, the third-largest shareholder, Bruce Mehlman is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of iLearningEngines
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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems that insiders own more than half the iLearningEngines, Inc. stock. This gives them a lot of power. So they have a US$467m stake in this US$661m business. 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 20% stake in iLearningEngines. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - iLearningEngines has 2 warning signs we think you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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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