PLAYSTUDIOS, Inc. (NASDAQ:MYPS) has caught the attention of institutional investors who hold a sizeable 33% stake
Key Insights
Significantly high institutional ownership implies PLAYSTUDIOS' stock price is sensitive to their trading actions
A total of 8 investors have a majority stake in the company with 52% ownership
Every investor in PLAYSTUDIOS, Inc. (NASDAQ:MYPS) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 33% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of PLAYSTUDIOS, beginning with the chart below.
See our latest analysis for PLAYSTUDIOS
What Does The Institutional Ownership Tell Us About PLAYSTUDIOS?
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.
PLAYSTUDIOS already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 PLAYSTUDIOS' earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in PLAYSTUDIOS. With a 13% stake, CEO Andrew Pascal is the largest shareholder. In comparison, the second and third largest shareholders hold about 13% and 9.5% of the stock.
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.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of PLAYSTUDIOS
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 PLAYSTUDIOS, Inc.. It has a market capitalization of just US$425m, and insiders have US$61m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 31% stake in PLAYSTUDIOS. 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.
Public Company Ownership
Public companies currently own 22% of PLAYSTUDIOS stock. 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 PLAYSTUDIOS better, we need to consider many other factors. For example, we've discovered 1 warning sign for PLAYSTUDIOS that you should be aware of before investing here.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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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.
