Is Spotify Technology SA (NYSE: SPOT) shareholding biased in favor of insiders?
If you want to know who actually controls Spotify Technology SA (NYSE: SPOT), then you will need to examine the makeup of its share register. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it can suggest that the management is owner-driven.
Spotify Technology has a market cap of $ 44 billion, so it’s too big to go unnoticed. We expect institutions and retail investors to own a portion of the company. In the graphic below, we can see that the institutions are visible on the share register. We can zoom in on the different ownership groups to learn more about Spotify technology.
Check out our latest analysis for Spotify Technology
What does institutional ownership tell us about Spotify technology?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors have a significant stake in Spotify Technology. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company without a history of growth. You can see Spotify Technology’s historical revenue and revenue below, but keep in mind that there is always more to tell.
Investors should note that institutions actually own more than half of the business, so they can collectively wield significant power. Spotify Technology is not owned by hedge funds. Rosello Company Limited is currently the largest shareholder in the company with 11% of the shares outstanding. Meanwhile, the second and third shareholders hold respectively 11% and 9.5% of the outstanding shares. In addition, the CEO of the company, Daniel Ek, directly owns 8.0% of the total shares outstanding.
Upon closer inspection, we found that more than half of the company’s stock is owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are to some extent offset by the smaller ones.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a lot of analysts covering the stock, so you can look at the expected growth quite easily.
Insider Ownership of Spotify Technology
The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would likely be interested to learn that insiders own shares of Spotify Technology SA. It is a very large company and the members of the board of directors collectively own $ 3.7 billion in shares (at current prices). Sometimes I’m interested in whether they bought or sold.
General public property
The general public, with a 13% stake in the company, will not be easily ignored. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Owned by a private company
Our data indicates that private companies own 11% of the company’s shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as an individual. While it is difficult to draw general conclusions, it should be noted that this is an additional area of research.
Public enterprise ownership
It can be seen that state-owned companies hold 8.7% of Spotify Technology’s shares at issue. It may be a strategic interest and the two companies may have related business interests. It could be that they defused. This exploitation probably deserves to be deepened.
It’s always worth thinking about the different groups that own shares in a company. But to better understand Spotify technology, there are many other factors that we need to consider. Consider risks, for example. Every business has them, and we’ve spotted 1 warning sign for Spotify technology you should know.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.
If you are looking to trade Spotify technology, open an account with the cheapest * professional approved platform, Interactive Brokers. Their clients from more than 200 countries and territories trade stocks, options, futures, currencies, bonds and funds around the world from a single integrated account.Promoted