The considerable ownership by retail investors in SPARQ Systems indicates that they collectively have a greater say in management and business strategy
A total of 10 investors have a majority stake in the company with 50% ownership
A look at the shareholders of SPARQ Systems Inc. (CVE:SPRQ) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While retail investors were the group that benefitted the most from last week’s CA$66m market cap gain, insiders too had a 24% share in those profits.
Let's delve deeper into each type of owner of SPARQ Systems, beginning with the chart below.
What Does The Institutional Ownership Tell Us About SPARQ Systems?
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.
Institutions have a very small stake in SPARQ Systems. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
TSXV:SPRQ Earnings and Revenue Growth January 2nd 2025
We note that hedge funds don't have a meaningful investment in SPARQ Systems. Looking at our data, we can see that the largest shareholder is the CEO Praveen Jain with 14% of shares outstanding. With 13% and 9.0% of the shares outstanding respectively, Highchart Investments Limited and Baronson Trust are the second and third largest shareholders.
A deeper look at our ownership data shows that the top 10 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of SPARQ Systems
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.
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 SPARQ Systems Inc.. Insiders have a CA$39m stake in this CA$163m business. 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 50% of SPARQ Systems. 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.
Private Company Ownership
It seems that Private Companies own 22%, of the SPARQ Systems stock. 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 SPARQ Systems better, we need to consider many other factors. Be aware that SPARQ Systems is showing 4 warning signs in our investment analysis, and 2 of those are a bit unpleasant...
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.
