What Kind Of Shareholders Hold The Majority In CooTek (Cayman) Inc.'s (NYSE:CTK) Shares?
A look at the shareholders of CooTek (Cayman) Inc. (NYSE:CTK) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.
CooTek (Cayman) is a smaller company with a market capitalization of US$106m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's delve deeper into each type of owner, to discover more about CooTek (Cayman).
View our latest analysis for CooTek (Cayman)
What Does The Institutional Ownership Tell Us About CooTek (Cayman)?
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.
Since institutions own only a small portion of CooTek (Cayman), many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in CooTek (Cayman). Qiming Weichuang Venture Capital Management (Shanghai) Company Limited is currently the company's largest shareholder with 16% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 15% by the third-largest shareholder. Jia Liang Wang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
Our research also brought to light the fact that roughly 60% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of CooTek (Cayman)
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 most recent data indicates that insiders own a reasonable proportion of CooTek (Cayman) Inc.. Insiders have a US$34m stake in this US$106m business. 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 holds a 18% stake in CooTek (Cayman). 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
Private equity firms hold a 45% stake in CooTek (Cayman). This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that CooTek (Cayman) is showing 5 warning signs in our investment analysis , and 3 of those can't be ignored...
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
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.
