Following recent decline, Cloudbreak Pharma Inc.'s (HKG:2592) top shareholder CEO Jinsong Ni sees holdings value drop by 17%
Key Insights
- Cloudbreak Pharma's significant insider ownership suggests inherent interests in company's expansion
- The top 4 shareholders own 55% of the company
- Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Cloudbreak Pharma Inc. (HKG:2592), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 44% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And last week, insiders endured the biggest losses as the stock fell by 17%.
Let's delve deeper into each type of owner of Cloudbreak Pharma, beginning with the chart below.
See our latest analysis for Cloudbreak Pharma
What Does The Lack Of Institutional Ownership Tell Us About Cloudbreak Pharma?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Cloudbreak Pharma's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Cloudbreak Pharma is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jinsong Ni with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 8.0%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Van Dinh is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Cloudbreak Pharma
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
Our most recent data indicates that insiders own a reasonable proportion of Cloudbreak Pharma Inc.. Insiders have a HK$1.7b stake in this HK$3.8b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Cloudbreak Pharma. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 23%, of the Cloudbreak Pharma stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Cloudbreak Pharma has 3 warning signs we think you should be aware of.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.