Yahoo Finance Retail investors invested in LexinFintech Holdings Ltd. (NASDAQ:LX) copped the brunt of last week's US$148m market cap decline
Key Insights
The considerable ownership by retail investors in LexinFintech Holdings indicates that they collectively have a greater say in management and business strategy
A total of 25 investors have a majority stake in the company with 49% ownership
A look at the shareholders of LexinFintech Holdings Ltd. (NASDAQ:LX) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
While the holdings of retail investors took a hit after last week’s 26% price drop, insiders with their 26% also suffered.
Let's delve deeper into each type of owner of LexinFintech Holdings, beginning with the chart below.
Check out our latest analysis for LexinFintech Holdings
What Does The Institutional Ownership Tell Us About LexinFintech Holdings?
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.
As you can see, institutional investors have a fair amount of stake in LexinFintech Holdings. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of LexinFintech Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in LexinFintech Holdings. The company's CEO Wenjie Xiao is the largest shareholder with 24% of shares outstanding. K2 Partners II L.P. is the second largest shareholder owning 8.0% of common stock, and Fidelity International Ltd holds about 3.7% of the company stock.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of LexinFintech Holdings
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of LexinFintech Holdings Ltd.. Insiders have a US$108m stake in this US$409m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LexinFintech Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With a stake of 8.0%, private equity firms could influence the LexinFintech Holdings board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand LexinFintech Holdings better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with LexinFintech Holdings .
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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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.
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