Yahoo Finance Individual investors who have a significant stake must be disappointed along with institutions after FREYR Battery, Inc.'s (NYSE:FREY) market cap dropped by US$31m
Key Insights
Significant control over FREYR Battery by individual investors implies that the general public has more power to influence management and governance-related decisions
The top 13 shareholders own 51% of the company
Every investor in FREYR Battery, Inc. (NYSE:FREY) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 38% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions who own 36% came under pressure after market cap dropped to US$239m last week,individual investors took the most losses.
Let's delve deeper into each type of owner of FREYR Battery, beginning with the chart below.
Check out our latest analysis for FREYR Battery
What Does The Institutional Ownership Tell Us About FREYR Battery?
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 FREYR Battery. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 FREYR Battery, (below). Of course, keep in mind that there are other factors to consider, too.
It would appear that 9.6% of FREYR Battery shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Encompass Capital Advisors LLC is currently the largest shareholder, with 9.6% of shares outstanding. The second and third largest shareholders are Morgan Stanley, Investment Banking and Brokerage Investments and Spring Creek Capital, LLC, with an equal amount of shares to their name at 8.3%. Furthermore, CEO Tom-Einar Jensen is the owner of 1.1% of the company's shares.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of FREYR Battery
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. 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 FREYR Battery, Inc.. It has a market capitalization of just US$239m, and insiders have US$26m worth of shares in their own names. 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 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over FREYR Battery. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
It seems that Private Companies own 5.1%, of the FREYR Battery stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for FREYR Battery (2 can't be ignored) that 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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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
