Individual investors account for 41% of Equillium, Inc.'s (NASDAQ:EQ) ownership, while insiders account for 20%
Key Insights
The considerable ownership by individual investors in Equillium indicates that they collectively have a greater say in management and business strategy
A total of 8 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of Equillium, Inc. (NASDAQ:EQ), 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 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual insiders make up 20% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
In the chart below, we zoom in on the different ownership groups of Equillium.
View our latest analysis for Equillium
What Does The Institutional Ownership Tell Us About Equillium?
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.
Equillium 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. 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 Equillium's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Equillium. Our data shows that Decheng Capital LLC is the largest shareholder with 13% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 6.6% by the third-largest shareholder. Bruce Steel, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Equillium
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.
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.
It seems insiders own a significant proportion of Equillium, Inc.. It has a market capitalization of just US$101m, and insiders have US$20m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. 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 18%, private equity firms could influence the Equillium 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.
Private Company Ownership
It seems that Private Companies own 5.3%, of the Equillium 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.
Public Company Ownership
We can see that public companies hold 6.6% of the Equillium 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Equillium better, we need to consider many other factors. Be aware that Equillium is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...
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.
