With 62% institutional ownership, Snowflake Inc. (NYSE:SNOW) is a favorite amongst the big guns
In This Article:
Key Insights
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Significantly high institutional ownership implies Snowflake's stock price is sensitive to their trading actions
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A total of 25 investors have a majority stake in the company with 42% ownership
To get a sense of who is truly in control of Snowflake Inc. (NYSE:SNOW), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 62% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Snowflake.
View our latest analysis for Snowflake
What Does The Institutional Ownership Tell Us About Snowflake?
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.
Snowflake already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Snowflake, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Snowflake. The Vanguard Group, Inc. is currently the company's largest shareholder with 8.2% of shares outstanding. For context, the second largest shareholder holds about 5.0% of the shares outstanding, followed by an ownership of 2.6% by the third-largest shareholder.
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.