Significant insider control over Big Tree Cloud Holdings implies vested interests in company growth
88% of the company is held by a single shareholder (Wenquan Zhu)
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Big Tree Cloud Holdings Limited (NASDAQ:DSY), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 88% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Clearly, insiders benefitted the most after the company's market cap rose by US$21m last week.
Let's take a closer look to see what the different types of shareholders can tell us about Big Tree Cloud Holdings.
NasdaqGM:DSY Ownership Breakdown December 12th 2024
What Does The Lack Of Institutional Ownership Tell Us About Big Tree Cloud Holdings?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Big Tree Cloud Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
NasdaqGM:DSY Earnings and Revenue Growth December 12th 2024
Hedge funds don't have many shares in Big Tree Cloud Holdings. With a 88% stake, CEO Wenquan Zhu is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Meanwhile, the second and third largest shareholders, hold 0.1% and 0.02%, of the shares outstanding, respectively.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Big Tree Cloud Holdings
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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 information suggests that insiders own more than half of Big Tree Cloud Holdings Limited. This gives them effective control of the company. Given it has a market cap of US$191m, that means they have US$168m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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.
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.
