Yahoo Finance Private equity firms invested in Squarespace, Inc. (NYSE:SQSP) up 10% last week, insiders too were rewarded
If you want to know who really controls Squarespace, Inc. (NYSE:SQSP), then you'll have to look at the makeup of its share registry. We can see that private equity firms own the lion's share in the company with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Private equity firms gained the most after market cap touched US$3.1b last week, while insiders who own 36% also benefitted.
Let's take a closer look to see what the different types of shareholders can tell us about Squarespace.
View our latest analysis for Squarespace
What Does The Institutional Ownership Tell Us About Squarespace?
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.
As you can see, institutional investors have a fair amount of stake in Squarespace. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Squarespace's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Squarespace. With a 35% stake, CEO Anthony Casalena is the largest shareholder. In comparison, the second and third largest shareholders hold about 20% and 11% of the stock.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Squarespace
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.
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 information suggests that insiders maintain a significant holding in Squarespace, Inc.. Insiders own US$1.1b worth of shares in the US$3.1b 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
With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Squarespace. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
With a stake of 37%, private equity firms could influence the Squarespace 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Squarespace that you should be aware of before investing here.
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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