X4 Pharmaceuticals, Inc.'s (NASDAQ:XFOR) largest shareholders are retail investors with 42% ownership, institutions own 32%
Key Insights
The considerable ownership by retail investors in X4 Pharmaceuticals indicates that they collectively have a greater say in management and business strategy
50% of the business is held by the top 14 shareholders
To get a sense of who is truly in control of X4 Pharmaceuticals, Inc. (NASDAQ:XFOR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 32% of the company’s shareholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's take a closer look to see what the different types of shareholders can tell us about X4 Pharmaceuticals.
Check out our latest analysis for X4 Pharmaceuticals
What Does The Institutional Ownership Tell Us About X4 Pharmaceuticals?
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.
As you can see, institutional investors have a fair amount of stake in X4 Pharmaceuticals. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see X4 Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 5.1% of X4 Pharmaceuticals shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Bain Capital Life Sciences Investors, LLC, with ownership of 10%. Meanwhile, the second and third largest shareholders, hold 9.7% and 5.1%, of the shares outstanding, respectively.
A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of X4 Pharmaceuticals
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.
Our data suggests that insiders own under 1% of X4 Pharmaceuticals, Inc. in their own names. It has a market capitalization of just US$164m, and the board has only US$648k worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 42% stake in X4 Pharmaceuticals. 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
With a stake of 20%, private equity firms could influence the X4 Pharmaceuticals board. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand X4 Pharmaceuticals better, we need to consider many other factors. Take risks for example - X4 Pharmaceuticals has 4 warning signs (and 2 which shouldn't be ignored) we think 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.
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