Advertisement
U.S. markets open in 2 hours 27 minutes
  • S&P Futures

    5,306.75
    -1.50 (-0.03%)
     
  • Dow Futures

    40,142.00
    -2.00 (-0.00%)
     
  • Nasdaq Futures

    18,500.25
    -3.50 (-0.02%)
     
  • Russell 2000 Futures

    2,137.60
    -0.80 (-0.04%)
     
  • Crude Oil

    82.18
    +0.83 (+1.02%)
     
  • Gold

    2,232.20
    +19.50 (+0.88%)
     
  • Silver

    24.80
    +0.04 (+0.17%)
     
  • EUR/USD

    1.0792
    -0.0037 (-0.35%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    13.00
    +0.22 (+1.72%)
     
  • GBP/USD

    1.2617
    -0.0021 (-0.17%)
     
  • USD/JPY

    151.3880
    +0.1420 (+0.09%)
     
  • Bitcoin USD

    70,745.82
    +610.22 (+0.87%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,957.23
    +25.25 (+0.32%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Do Insiders Own Lots Of Shares In IronNet, Inc. (NYSE:IRNT)?

If you want to know who really controls IronNet, Inc. (NYSE:IRNT), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

IronNet is not a large company by global standards. It has a market capitalization of US$244m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about IronNet.

See our latest analysis for IronNet

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About IronNet?

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 IronNet. 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 IronNet, (below). Of course, keep in mind that there are other factors to consider, too.

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

We note that hedge funds don't have a meaningful investment in IronNet. With a 11% stake, CEO Keith Alexander is the largest shareholder. With 10.0% and 7.1% of the shares outstanding respectively, ForgePoint Capital Management, LLC and William Welch are the second and third largest shareholders. Interestingly, the third-largest shareholder, William Welch is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 IronNet

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 IronNet, Inc.. It has a market capitalization of just US$244m, and insiders have US$55m 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 38% 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 Equity Ownership

Private equity firms hold a 23% stake in IronNet. This suggests they can be influential in key policy decisions. 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 3.4%, of the IronNet stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand IronNet better, we need to consider many other factors. Take risks for example - IronNet has 5 warning signs (and 2 which shouldn't be ignored) we think you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

Advertisement