In this article, I will take a quick look at Easterly Acquisition Corp’s (NASDAQ:EACQ) recent ownership structure – an unconventional investing subject, but an important one. A company’s ownership structure is often linked to its share performance in both the long- and short-term. Since the effect of an active institutional investor with a similar ownership as a passive pension-fund can be vastly different on a company’s corporate governance and accountability of shareholders, investors should take a closer look at EACQ’s shareholder registry. All data provided is as of the most recent financial year end.
See our latest analysis for EACQ
Institutional Ownership
In EACQ’s case, institutional ownership stands at 209.62%, significant enough to cause considerable price moves in the case of large institutional transactions, especially when there is a low level of public shares available on the market to trade. These moves, at least in the short-term, are generally observed in an institutional ownership mix comprising of active stock pickers, in particular levered hedge funds, which can cause large price swings. In the case of EACQ, investors need not worry about such volatility considering active hedge funds don’t have a significant stake. However, we should dig deeper into EACQ’s ownership structure and find out how other key ownership classes can affect its investment profile.
Insider Ownership
I find insiders are another important group of stakeholders, who are directly involved in making key decisions related to the use of capital. In essence, insider ownership is more about the alignment of shareholders’ interests with the management. Although individuals in EACQ hold only a 1.16% stake, it’s a good sign for shareholders as the company’s executives and directors have their incentives directly linked to the company’s performance. In addition to this, it may be interesting to look at insider buying and selling activities. Keep in mind that buying may be sign of upbeat future expectations, but selling doesn’t necessarily mean the opposite as the insiders might just be doing it out of their personal financial needs.
Private Company Ownership
Another important group of owners for potential investors in EACQ are private companies that hold a stake of 107.35% in EACQ. These are companies that are mainly invested due to their strategic interests or are incentivized by reaping capital gains on investments their shareholdings. An ownership of this size indicates a strong financial backing and has the potential to influence EACQ’s business strategy. Thus, investors should dig deeper into EACQ’s business relations with these companies and how it can affect shareholder returns in the long-term.