Yahoo Finance Institutions profited after SoFi Technologies, Inc.'s (NASDAQ:SOFI) market cap rose US$301m last week but retail investors profited the most
Key Insights
The considerable ownership by retail investors in SoFi Technologies indicates that they collectively have a greater say in management and business strategy
41% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of SoFi Technologies, Inc. (NASDAQ:SOFI), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 3.9% increase in the stock price last week, retail investors profited the most, but institutions who own 36% stock also stood to gain from the increase.
Let's delve deeper into each type of owner of SoFi Technologies, beginning with the chart below.
View our latest analysis for SoFi Technologies
What Does The Institutional Ownership Tell Us About SoFi Technologies?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that SoFi Technologies does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at SoFi Technologies' earnings history below. Of course, the future is what really matters.
SoFi Technologies is not owned by hedge funds. The Vanguard Group, Inc. is currently the largest shareholder, with 7.4% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.8% and 4.5% of the stock. Furthermore, CEO Anthony Noto is the owner of 0.7% of the company's shares.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of SoFi Technologies
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.
It seems insiders own a significant proportion of SoFi Technologies, Inc.. It is very interesting to see that insiders have a meaningful US$835m stake in this US$8.0b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. 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.
Public Company Ownership
Public companies currently own 4.8% of SoFi Technologies stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
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 SoFi Technologies is showing 4 warning signs in our investment analysis , you should know about...
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.
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