Bit Digital, Inc. (NASDAQ:BTBT) surges 13%; individual investors who own 59% shares profited along with institutions
Key Insights
The considerable ownership by individual investors in Bit Digital indicates that they collectively have a greater say in management and business strategy
A total of 25 investors have a majority stake in the company with 39% ownership
To get a sense of who is truly in control of Bit Digital, Inc. (NASDAQ:BTBT), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While individual investors were the group that reaped the most benefits after last week’s 13% price gain, institutions also received a 41% cut.
Let's take a closer look to see what the different types of shareholders can tell us about Bit Digital.
View our latest analysis for Bit Digital
What Does The Institutional Ownership Tell Us About Bit Digital?
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.
Bit Digital 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. 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 Bit Digital's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Bit Digital. Invesco Capital Management LLC is currently the company's largest shareholder with 6.6% of shares outstanding. With 6.3% and 4.1% of the shares outstanding respectively, BlackRock, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 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 Bit Digital
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that Bit Digital, Inc. insiders own under 1% of the company. It appears that the board holds about US$1.3m worth of stock. This compares to a market capitalization of US$305m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 59% stake in Bit Digital, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Bit Digital better, we need to consider many other factors. Be aware that Bit Digital is showing 4 warning signs in our investment analysis , and 1 of those is significant...
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
