To get a sense of who is truly in control of Kingsoft Cloud Holdings Limited (NASDAQ:KC), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Clearly, public companies benefitted the most after the company's market cap rose by US$892m last week.
Let's delve deeper into each type of owner of Kingsoft Cloud Holdings, beginning with the chart below.
NasdaqGS:KC Ownership Breakdown February 15th 2025
What Does The Institutional Ownership Tell Us About Kingsoft Cloud Holdings?
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.
We can see that Kingsoft Cloud Holdings does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Kingsoft Cloud Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:KC Earnings and Revenue Growth February 15th 2025
Hedge funds don't have many shares in Kingsoft Cloud Holdings. Looking at our data, we can see that the largest shareholder is Kingsoft Corporation Limited with 41% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 5.4% by the third-largest shareholder.
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.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Kingsoft Cloud Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own less than 1% of Kingsoft Cloud Holdings Limited. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$2.9m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kingsoft Cloud Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 55% of the Kingsoft Cloud Holdings shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Kingsoft Cloud Holdings better, we need to consider many other factors. For instance, we've identified 3 warning signs for Kingsoft Cloud Holdings (2 are potentially serious) that 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.
