Private equity firms among Dingdong (Cayman) Limited's (NYSE:DDL) largest stockholders and were hit after last week's 11% price drop
Key Insights
Dingdong (Cayman)'s significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
A total of 5 investors have a majority stake in the company with 52% ownership
If you want to know who really controls Dingdong (Cayman) Limited (NYSE:DDL), then you'll have to look at the makeup of its share registry. With 34% stake, private equity firms possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 11% decrease in the stock price last week, private equity firms suffered the most losses, but insiders who own 29% stock also took a hit.
Let's delve deeper into each type of owner of Dingdong (Cayman), beginning with the chart below.
View our latest analysis for Dingdong (Cayman)
What Does The Institutional Ownership Tell Us About Dingdong (Cayman)?
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 Dingdong (Cayman). 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 Dingdong (Cayman)'s earnings history below. Of course, the future is what really matters.
Dingdong (Cayman) is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Liang Changlin with 28% of shares outstanding. SoftBank Investment Advisers (UK) Limited is the second largest shareholder owning 6.4% of common stock, and General Atlantic Service Company, L.P. holds about 6.0% of the company stock.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Dingdong (Cayman)
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.
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 Dingdong (Cayman) Limited. Insiders have a US$161m stake in this US$558m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 20% 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 Equity Ownership
Private equity firms hold a 34% stake in Dingdong (Cayman). 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.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Dingdong (Cayman) , and understanding them should be part of your investment process.
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.
