Every investor in Robinhood Markets, Inc. (NASDAQ:HOOD) should be aware of the most powerful shareholder groups. With 62% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutional investors was the group most impacted after the company's market cap fell to US$31b last week. Still, the 87% one-year gains may have helped mitigate their overall losses. But they would probably be wary of future losses.
Let's take a closer look to see what the different types of shareholders can tell us about Robinhood Markets.
What Does The Institutional Ownership Tell Us About Robinhood Markets?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Robinhood Markets. 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 Robinhood Markets' historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:HOOD Earnings and Revenue Growth April 9th 2025
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Robinhood Markets. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 7.7% of shares outstanding. With 7.2% and 6.1% of the shares outstanding respectively, Baiju Bhatt and Vladimir Tenev are the second and third largest shareholders. Two of the top three shareholders happen to be Top Key Executive and Chairman of the Board, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.
After doing some more digging, we found that the top 20 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Robinhood Markets
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 maintain a significant holding in Robinhood Markets, Inc.. Insiders own US$4.5b worth of shares in the US$31b company. That's quite meaningful. 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
With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Robinhood Markets. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Robinhood Markets better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Robinhood Markets you should be aware of.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts .
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.
