U.S. Markets close in 35 mins
  • S&P 500

    4,586.49
    +34.81 (+0.76%)
     
  • Dow 30

    35,634.88
    +144.19 (+0.41%)
     
  • Nasdaq

    15,419.07
    +183.23 (+1.20%)
     
  • Russell 2000

    2,291.41
    +38.92 (+1.73%)
     
  • Gold

    1,803.10
    +4.30 (+0.24%)
     
  • EUR/USD

    1.1689
    +0.0083 (+0.7130%)
     
  • 10-Yr Bond

    1.5680
    +0.0390 (+2.55%)
     
  • Vix

    16.43
    -0.55 (-3.24%)
     
  • GBP/USD

    1.3787
    +0.0045 (+0.3240%)
     
  • USD/JPY

    113.5370
    -0.2730 (-0.2399%)
     
  • BTC-USD

    60,264.14
    +1,967.58 (+3.38%)
     
  • CMC Crypto 200

    1,458.34
    +38.97 (+2.75%)
     
  • FTSE 100

    7,249.47
    -3.80 (-0.05%)
     
  • Nikkei 225

    28,820.09
    -278.11 (-0.96%)
     

Could The Atlantic Avenue Acquisition Corp (NYSE:ASAQ) Ownership Structure Tell Us Something Useful?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

A look at the shareholders of Atlantic Avenue Acquisition Corp (NYSE:ASAQ) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Atlantic Avenue Acquisition is not a large company by global standards. It has a market capitalization of US$306m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Atlantic Avenue Acquisition.

See our latest analysis for Atlantic Avenue Acquisition

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Atlantic Avenue Acquisition?

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.

Atlantic Avenue Acquisition already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Atlantic Avenue Acquisition, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It looks like hedge funds own 5.0% of Atlantic Avenue Acquisition 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. The company's CEO Ashok Nayyar is the largest shareholder with 15% of shares outstanding. The second and third largest shareholders are Karpus Management Inc. and Citadel Advisors LLC, with an equal amount of shares to their name at 5.0%.

After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 Atlantic Avenue Acquisition

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Atlantic Avenue Acquisition Corp. It has a market capitalization of just US$306m, and insiders have US$49m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 13% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 4.0% of the Atlantic Avenue Acquisition shares on issue. 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. To that end, you should learn about the 2 warning signs we've spotted with Atlantic Avenue Acquisition (including 1 which can't be ignored) .

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.