SkyWater Technology, Inc.'s (NASDAQ:SKYT) market cap up US$60m last week, benefiting both private equity firms who own 30% as well as insiders
Key Insights
Significant control over SkyWater Technology by private equity firms implies that the general public has more power to influence management and governance-related decisions
A total of 4 investors have a majority stake in the company with 54% ownership
To get a sense of who is truly in control of SkyWater Technology, Inc. (NASDAQ:SKYT), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 30% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While private equity firms were the group that benefitted the most from last week’s US$60m market cap gain, insiders too had a 25% share in those profits.
Let's take a closer look to see what the different types of shareholders can tell us about SkyWater Technology.
Check out our latest analysis for SkyWater Technology
What Does The Institutional Ownership Tell Us About SkyWater Technology?
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.
SkyWater Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SkyWater Technology, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in SkyWater Technology. Looking at our data, we can see that the largest shareholder is Oxbow Industries, LLC with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 9.2% of the stock. Additionally, the company's CEO Thomas Sonderman directly holds 0.9% of the total shares outstanding.
On looking further, we found that 54% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 SkyWater Technology
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Our information suggests that insiders maintain a significant holding in SkyWater Technology, Inc.. Insiders own US$123m worth of shares in the US$483m company. 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
With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SkyWater Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
Private equity firms hold a 30% stake in SkyWater Technology. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand SkyWater Technology better, we need to consider many other factors. Be aware that SkyWater Technology is showing 3 warning signs in our investment analysis , you should know about...
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.
