Retail investors who have a significant stake must be disappointed along with institutions after Bakkt Holdings, Inc.'s (NYSE:BKKT) market cap dropped by US$12m
A look at the shareholders of Bakkt Holdings, Inc. (NYSE:BKKT) can tell us which group is most powerful. With 60% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions, who own 37% shares weren’t spared from last week’s US$12m market cap drop, retail investors as a group suffered the maximum losses
Let's take a closer look to see what the different types of shareholders can tell us about Bakkt Holdings.
What Does The Institutional Ownership Tell Us About Bakkt Holdings?
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.
Bakkt Holdings 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Bakkt Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
NYSE:BKKT Earnings and Revenue Growth August 5th 2024
Hedge funds don't have many shares in Bakkt Holdings. Our data shows that IntercontinentalExchange, Inc., Asset Management Arm is the largest shareholder with 10% of shares outstanding. Horizon Kinetics LLC is the second largest shareholder owning 5.0% of common stock, and Teachers Insurance and Annuity Association-College Retirement Equities Fund holds about 3.3% of the company stock.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Bakkt Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 some shares in Bakkt Holdings, Inc.. As individuals, the insiders collectively own US$5.7m worth of the US$207m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 60% of Bakkt Holdings shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Bakkt Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Bakkt Holdings (at least 2 which can't be ignored) , and understanding them should be part of your investment process.
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.
