Markforged Holding Corporation's (NYSE:MKFG) market cap dropped US$21m last week; individual investors who hold 37% were hit as were institutions
Key Insights
The considerable ownership by private equity firms in Markforged Holding indicates that they collectively have a greater say in management and business strategy
A total of 5 investors have a majority stake in the company with 55% ownership
A look at the shareholders of Markforged Holding Corporation (NYSE:MKFG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 37% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions, who own 31% shares weren’t spared from last week’s US$21m market cap drop, private equity firms as a group suffered the maximum losses
Let's take a closer look to see what the different types of shareholders can tell us about Markforged Holding.
Check out our latest analysis for Markforged Holding
What Does The Institutional Ownership Tell Us About Markforged Holding?
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 Markforged Holding. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Markforged Holding's earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 8.8% of Markforged Holding. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Matrix Management Corporation is currently the company's largest shareholder with 15% of shares outstanding. With 15% and 9.5% of the shares outstanding respectively, North Bridge Venture Management Company, LLC and ARK Investment Management LLC are the second and third largest shareholders.
On looking further, we found that 55% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 Markforged Holding
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.
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.
We can report that insiders do own shares in Markforged Holding Corporation. It has a market capitalization of just US$147m, and insiders have US$6.9m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Markforged Holding. 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 37%, private equity firms could influence the Markforged Holding 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 4.3%, of the Markforged Holding 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:
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. For example, we've discovered 3 warning signs for Markforged Holding that you should be aware of before investing here.
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.
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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.
