Private companies account for 37% of Chicken Soup for the Soul Entertainment, Inc.'s (NASDAQ:CSSE) ownership, while individual investors account for 31%
Key Insights
Significant control over Chicken Soup for the Soul Entertainment by private companies implies that the general public has more power to influence management and governance-related decisions
53% of the business is held by the top 4 shareholders
Institutions own 28% of Chicken Soup for the Soul Entertainment
A look at the shareholders of Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) 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 companies. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, individual investors make up 31% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of Chicken Soup for the Soul Entertainment.
View our latest analysis for Chicken Soup for the Soul Entertainment
What Does The Institutional Ownership Tell Us About Chicken Soup for the Soul Entertainment?
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.
We can see that Chicken Soup for the Soul Entertainment does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Chicken Soup for the Soul Entertainment, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Chicken Soup for the Soul Entertainment. The company's largest shareholder is Chicken Soup for the Soul Holdings, LLC, with ownership of 37%. Granahan Investment Management, LLC is the second largest shareholder owning 6.6% of common stock, and HPS Investment Partners, LLC holds about 4.9% of the company stock. Additionally, the company's CEO William Rouhana directly holds 1.5% of the total shares outstanding.
Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Chicken Soup for the Soul Entertainment
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.
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.
We can see that insiders own shares in Chicken Soup for the Soul Entertainment, Inc.. It has a market capitalization of just US$110m, and insiders have US$4.5m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 31% 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 Company Ownership
It seems that Private Companies own 37%, of the Chicken Soup for the Soul Entertainment stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Chicken Soup for the Soul Entertainment better, we need to consider many other factors. For example, we've discovered 2 warning signs for Chicken Soup for the Soul Entertainment that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
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