With 34% ownership in Expensify, Inc. (NASDAQ:EXFY), insiders continue to have the largest holding even though they have sold shares recently

editorial-team@simplywallst.com (Simply Wall St)

Wed, Jan 8, 2025, 4:09 AM 4 min read

To get a sense of who is truly in control of Expensify, Inc. (NASDAQ:EXFY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 34% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Despite selling some shares recently, insiders control a good portion of the company's stock.

Let's delve deeper into each type of owner of Expensify, beginning with the chart below.

View our latest analysis for Expensify

ownership-breakdown — NasdaqGS:EXFY Ownership Breakdown January 8th 2025

What Does The Institutional Ownership Tell Us About Expensify?

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 Expensify. 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. 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 Expensify's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — NasdaqGS:EXFY Earnings and Revenue Growth January 8th 2025

We note that hedge funds don't have a meaningful investment in Expensify. The company's largest shareholder is Steve McLaughlin, with ownership of 13%. In comparison, the second and third largest shareholders hold about 8.5% and 7.3% of the stock. David Barrett, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Expensify

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Expensify, Inc.. It has a market capitalization of just US$310m, and insiders have US$105m 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-- including retail investors -- own 30% 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 5.3% stake in Expensify. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Expensify better, we need to consider many other factors. Take risks for example - Expensify has 3 warning signs we think you should be aware of.

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.