Private companies invested in Vaxxinity, Inc. (NASDAQ:VAXX) copped the brunt of last week's US$41m market cap decline
Key Insights
The considerable ownership by private companies in Vaxxinity indicates that they collectively have a greater say in management and business strategy
54% of the business is held by the top 2 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
A look at the shareholders of Vaxxinity, Inc. (NASDAQ:VAXX) can tell us which group is most powerful. The group holding the most number of shares in the company, around 44% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As market cap fell to US$120m last week, private companies would have faced the highest losses than any other shareholder groups of the company.
In the chart below, we zoom in on the different ownership groups of Vaxxinity.
View our latest analysis for Vaxxinity
What Does The Institutional Ownership Tell Us About Vaxxinity?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Vaxxinity. 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. 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 Vaxxinity, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Vaxxinity. The company's largest shareholder is United Biomedical, Inc., with ownership of 41%. Prime Movers Lab LLC is the second largest shareholder owning 13% of common stock, and Mei Hu holds about 4.4% of the company stock. Mei Hu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Vaxxinity
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders own shares in Vaxxinity, Inc.. As individuals, the insiders collectively own US$11m worth of the US$120m company. 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
With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vaxxinity. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 13% stake in Vaxxinity. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
Our data indicates that Private Companies hold 44%, of the company's shares. 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:
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 Vaxxinity is showing 4 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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.
