Retail investors invested in BeyondSpring Inc. (NASDAQ:BYSI) up 125% last week, insiders too were rewarded
Key Insights
Significant control over BeyondSpring by retail investors implies that the general public has more power to influence management and governance-related decisions
41% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of BeyondSpring Inc. (NASDAQ:BYSI), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While retail investors were the group that reaped the most benefits after last week’s 125% price gain, insiders also received a 24% cut.
Let's delve deeper into each type of owner of BeyondSpring, beginning with the chart below.
View our latest analysis for BeyondSpring
What Does The Institutional Ownership Tell Us About BeyondSpring?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Since institutions own only a small portion of BeyondSpring, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
BeyondSpring is not owned by hedge funds. The company's CEO Lan Huang is the largest shareholder with 24% of shares outstanding. With 13% and 1.2% of the shares outstanding respectively, Decheng Capital LLC and Lan Huang 2022 Grantor Retained Annuity Trust are the second and third largest shareholders.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of BeyondSpring
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.
Our information suggests that insiders maintain a significant holding in BeyondSpring Inc.. It has a market capitalization of just US$113m, and insiders have US$28m 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, mostly comprising of individual investors, collectively holds 59% of BeyondSpring shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Equity Ownership
Private equity firms hold a 13% stake in BeyondSpring. This suggests they can be influential in key policy decisions. 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.
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 BeyondSpring is showing 3 warning signs in our investment analysis , and 2 of those are significant...
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
