With 52% ownership of the shares, Investcorp Europe Acquisition Corp I (NASDAQ:IVCB) is heavily dominated by institutional owners
Key Insights
Given the large stake in the stock by institutions, Investcorp Europe Acquisition Corp I's stock price might be vulnerable to their trading decisions
52% of the business is held by the top 6 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Investcorp Europe Acquisition Corp I (NASDAQ:IVCB) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
In the chart below, we zoom in on the different ownership groups of Investcorp Europe Acquisition Corp I.
See our latest analysis for Investcorp Europe Acquisition Corp I
What Does The Institutional Ownership Tell Us About Investcorp Europe Acquisition Corp I?
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 Investcorp Europe Acquisition Corp I. 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. 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 Investcorp Europe Acquisition Corp I, (below). Of course, keep in mind that there are other factors to consider, too.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 6.3% of Investcorp Europe Acquisition Corp I shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data shows that Europe Acquisition Holdings Limited is the largest shareholder with 26% of shares outstanding. Glazer Capital, LLC is the second largest shareholder owning 6.3% of common stock, and Westchester Capital Management, LLC holds about 5.6% of the company stock. Furthermore, CEO Ruby McGregor-Smith is the owner of 3.1% of the company's shares.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. 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 Investcorp Europe Acquisition Corp I
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.
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 some shares in Investcorp Europe Acquisition Corp I. As individuals, the insiders collectively own US$17m worth of the US$304m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 10% 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.
Private Company Ownership
It seems that Private Companies own 26%, of the Investcorp Europe Acquisition Corp I 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. For example, we've discovered 3 warning signs for Investcorp Europe Acquisition Corp I that you should be aware of before investing here.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
