Painful week for individual investors invested in Life360, Inc. (ASX:360) after 8.2% drop, institutions also suffered losses

Key Insights

• Significant control over Life360 by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 41% ownership
• Institutions own 23% of Life360

If you want to know who really controls Life360, Inc. (ASX:360), 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 58% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 8.2% price drop, institutions with their 23% holdings also suffered.

Let's delve deeper into each type of owner of Life360, beginning with the chart below.

See our latest analysis for Life360

What Does The Institutional Ownership Tell Us About Life360?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Life360 already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Life360, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 6.8% of Life360. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Paradice Investment Management Pty Ltd. is currently the company's largest shareholder with 7.4% of shares outstanding. With 6.8% and 4.9% of the shares outstanding respectively, Regal Partners Limited and Challenger Limited are the second and third largest shareholders. In addition, we found that Christopher Hulls, the CEO has 3.1% of the shares allocated to their name.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Life360

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Life360, Inc.. As individuals, the insiders collectively own AU$138m worth of the AU$1.4b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Life360 shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Life360 has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.