Chief Scientific Officer Patrick Soon-Shiong, ImmunityBio, Inc.'s (NASDAQ:IBRX) largest shareholder sees value of holdings go down 6.5% after recent drop
A look at the shareholders of ImmunityBio, Inc. (NASDAQ:IBRX) can tell us which group is most powerful. With 43% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
As market cap fell to US$3.8b last week, insiders would have faced the highest losses than any other shareholder groups of the company.
In the chart below, we zoom in on the different ownership groups of ImmunityBio.
What Does The Institutional Ownership Tell Us About ImmunityBio?
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.
ImmunityBio 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. 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 ImmunityBio's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:IBRX Earnings and Revenue Growth July 31st 2024
We note that hedge funds don't have a meaningful investment in ImmunityBio. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In ImmunityBio's case, its Chief Scientific Officer, Patrick Soon-Shiong, is the largest shareholder, holding 42% of shares outstanding. With 20% and 14% of the shares outstanding respectively, California Capital Equity, LLC and NantWorks, LLC are the second and third largest shareholders.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of ImmunityBio
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.
It seems insiders own a significant proportion of ImmunityBio, Inc.. It has a market capitalization of just US$3.8b, and insiders have US$1.6b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public-- including retail investors -- own 13% 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.
Private Equity Ownership
With a stake of 20%, private equity firms could influence the ImmunityBio board. 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.
Private Company Ownership
We can see that Private Companies own 14%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 5 warning signs for ImmunityBio you should be aware of, and 4 of them make us uncomfortable.
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.
