In This Article:
Key Insights
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Given the large stake in the stock by institutions, Tesla's stock price might be vulnerable to their trading decisions
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44% of the business is held by the top 25 shareholders
If you want to know who really controls Tesla, Inc. (NASDAQ:TSLA), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of Tesla.
See our latest analysis for Tesla
What Does The Institutional Ownership Tell Us About Tesla?
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 Tesla does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Tesla's earnings history below. Of course, the future is what really matters.
Tesla is not owned by hedge funds. With a 13% stake, CEO Elon Musk is the largest shareholder. The Vanguard Group, Inc. is the second largest shareholder owning 7.5% of common stock, and BlackRock, Inc. holds about 6.1% of the company stock.
A deeper look at our ownership data shows that the top 25 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.