Individual investors account for 49% of BlackBerry Limited's (TSE:BB) ownership, while institutions account for 31%
- BlackBerry's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- The top 25 shareholders own 44% of the company
- Institutions own 31% of BlackBerry
To get a sense of who is truly in control of BlackBerry Limited (TSE:BB), it is important to understand the ownership structure of the business. With 49% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 31% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about BlackBerry.
Check out our latest analysis for BlackBerry
What Does The Institutional Ownership Tell Us About BlackBerry?
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.
As you can see, institutional investors have a fair amount of stake in BlackBerry. 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. 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 BlackBerry, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 10.0% of BlackBerry shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Fifthdelta Ltd, with ownership of 10.0%. With 8.0% and 6.2% of the shares outstanding respectively, Fairfax Financial Holdings Limited and PRIMECAP Management Company are the second and third largest shareholders. In addition, we found that John Chen, the CEO has 1.6% 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.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of BlackBerry
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Our most recent data indicates that insiders own some shares in BlackBerry Limited. This is a big company, so it is good to see this level of alignment. Insiders own CA$53m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 49% stake in BlackBerry. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
It appears to us that public companies own 8.0% of BlackBerry. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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 - BlackBerry has 1 warning sign we think you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
Valuation is complex, but we're helping make it simple.
Find out whether BlackBerry is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
BlackBerry Limited provides intelligent security software and services to enterprises and governments worldwide.
Excellent balance sheet and fair value.