A look at the shareholders of Weidai Ltd. (NYSE:WEI) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Weidai is not a large company by global standards. It has a market capitalization of US$165m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased shares. Let's take a closer look to see what the different types of shareholders can tell us about Weidai.
View our latest analysis for Weidai
What Does The Lack Of Institutional Ownership Tell Us About Weidai?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Weidai might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Weidai is not owned by hedge funds. The company's CEO Yao Hong is the largest shareholder with 50% of shares outstanding. Strait Innovation Internet Co., Ltd. is the second largest shareholder owning 14% of common stock, and Hudson River Trading LLC, Asset Management Arm holds about 0.1% of the company stock.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Weidai
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.