Insiders of Pulse Biosciences, Inc. (NASDAQ:PLSE) must be disappointed as stock fell 26% after recent purchases
Key Insights
Pulse Biosciences' significant insider ownership suggests inherent interests in company's expansion
The largest shareholder of the company is Robert Duggan with a 68% stake
To get a sense of who is truly in control of Pulse Biosciences, Inc. (NASDAQ:PLSE), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 70% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
It's interesting to note that insiders have been buying shares recently. However, with shares price down 26% last week, they must be disappointed.
Let's take a closer look to see what the different types of shareholders can tell us about Pulse Biosciences.
Check out our latest analysis for Pulse Biosciences
What Does The Institutional Ownership Tell Us About Pulse Biosciences?
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 Pulse Biosciences. 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 Pulse Biosciences' earnings history below. Of course, the future is what really matters.
Pulse Biosciences is not owned by hedge funds. Our data suggests that Robert Duggan, who is also the company's Top Key Executive, holds the most number of shares at 68%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 1.8% and 1.4%, of the shares outstanding, respectively.
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 Pulse Biosciences
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. 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.
It seems that insiders own more than half the Pulse Biosciences, Inc. stock. This gives them a lot of power. That means they own US$354m worth of shares in the US$509m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 22% stake in the company, and hence can't 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.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 4 warning signs we've spotted with Pulse Biosciences (including 2 which shouldn't be ignored) .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.
