Yahoo Finance Institutions own 38% of Coinbase Global, Inc. (NASDAQ:COIN) shares but individual investors control 44% of the company
Key Insights
Significant control over Coinbase Global by individual investors implies that the general public has more power to influence management and governance-related decisions
The top 25 shareholders own 42% of the company
To get a sense of who is truly in control of Coinbase Global, Inc. (NASDAQ:COIN), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, institutions make up 38% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about Coinbase Global.
Check out our latest analysis for Coinbase Global
What Does The Institutional Ownership Tell Us About Coinbase Global?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Coinbase Global already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Coinbase Global's historic earnings and revenue below, but keep in mind there's always more to the story.
Coinbase Global is not owned by hedge funds. The company's CEO Brian Armstrong is the largest shareholder with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.8% and 3.8%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Frederick Ehrsam is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Coinbase Global
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.
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.
Our most recent data indicates that insiders own a reasonable proportion of Coinbase Global, Inc.. Insiders own US$8.9b worth of shares in the US$53b company. That's quite meaningful. 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 44% stake in Coinbase Global. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Coinbase Global is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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.
