Insiders of Baijiayun Group Ltd (NASDAQ:RTC) were rewarded after last week’s 37% gain
Key Insights
Baijiayun Group's significant insider ownership suggests inherent interests in company's expansion
A total of 2 investors have a majority stake in the company with 54% ownership
To get a sense of who is truly in control of Baijiayun Group Ltd (NASDAQ:RTC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 28% 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).
Having purchased shares recently, insiders must be glad after market cap hit US$146m last week.
Let's take a closer look to see what the different types of shareholders can tell us about Baijiayun Group.
View our latest analysis for Baijiayun Group
What Does The Lack Of Institutional Ownership Tell Us About Baijiayun Group?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Baijiayun Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Baijiayun Group is not owned by hedge funds. The company's largest shareholder is Gangjiang Li, with ownership of 32%. With 22% and 9.9% of the shares outstanding respectively, Baijiayun Group Ltd, ESOP and Nuan Nuan Ltd are the second and third largest shareholders.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Baijiayun Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Baijiayun Group Ltd. Insiders own US$40m worth of shares in the US$146m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 24%, 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Baijiayun Group better, we need to consider many other factors. Be aware that Baijiayun Group is showing 3 warning signs in our investment analysis , and 2 of those are concerning...
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com