Retail investors who have a significant stake must be disappointed along with institutions after Hut 8 Corp.'s (NASDAQ:HUT) market cap dropped by US$112m
To get a sense of who is truly in control of Hut 8 Corp. (NASDAQ:HUT), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions who own 21% came under pressure after market cap dropped to US$1.4b last week,retail investors took the most losses.
Let's delve deeper into each type of owner of Hut 8, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Hut 8?
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.
As you can see, institutional investors have a fair amount of stake in Hut 8. 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. 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 Hut 8, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqGS:HUT Earnings and Revenue Growth July 12th 2024
It would appear that 10% of Hut 8 shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Coatue Management, L.L.C. is currently the largest shareholder, with 10% of shares outstanding. Michael Ho is the second largest shareholder owning 7.0% of common stock, and Asher Genoot holds about 3.4% of the company stock. Note that the second and third-largest shareholders are also Top Key Executive and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. 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 Hut 8
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. 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.
It seems insiders own a significant proportion of Hut 8 Corp.. It has a market capitalization of just US$1.4b, and insiders have US$159m 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, who are usually individual investors, hold a substantial 57% stake in Hut 8, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Hut 8 better, we need to consider many other factors. Be aware that Hut 8 is showing 3 warning signs in our investment analysis, and 2 of those are concerning...
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.
