Yahoo Finance Private equity firms account for 69% of WalkMe Ltd.'s (NASDAQ:WKME) ownership, while institutions account for 16%
Key Insights
WalkMe's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 4 shareholders own 56% of the company
To get a sense of who is truly in control of WalkMe Ltd. (NASDAQ:WKME), it is important to understand the ownership structure of the business. We can see that private equity firms own the lion's share in the company with 69% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 16% of the company’s shareholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's take a closer look to see what the different types of shareholders can tell us about WalkMe.
View our latest analysis for WalkMe
What Does The Institutional Ownership Tell Us About WalkMe?
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.
WalkMe 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see WalkMe's historic earnings and revenue below, but keep in mind there's always more to the story.
WalkMe is not owned by hedge funds. Insight Venture Management, LLC is currently the largest shareholder, with 26% of shares outstanding. StepStone Group LP is the second largest shareholder owning 11% of common stock, and Scale Management, L.L.C. holds about 10% of the company stock. Furthermore, CEO Dan Adika is the owner of 0.6% of the company's shares.
On looking further, we found that 56% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of WalkMe
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
We can see that insiders own shares in WalkMe Ltd.. In their own names, insiders own US$18m worth of stock in the US$745m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 12% stake in WalkMe. 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.
Private Equity Ownership
With a stake of 69%, private equity firms could influence the WalkMe board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand WalkMe better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for WalkMe you should be aware of.
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.
