The recent HK$104m market cap decrease is likely to have disappointed insiders invested in GT Gold Holdings Limited (HKG:8299)

Key Insights

• Significant insider control over GT Gold Holdings implies vested interests in company growth
• 57% of the company is held by a single shareholder (Qianzhou Ma)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of GT Gold Holdings Limited (HKG:8299), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by HK$104m.

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

See our latest analysis for GT Gold Holdings

What Does The Lack Of Institutional Ownership Tell Us About GT Gold Holdings?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. GT Gold Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in GT Gold Holdings. Our data shows that Qianzhou Ma is the largest shareholder with 57% of shares outstanding. This implies that they have majority interest control of the future 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of GT Gold Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of GT Gold Holdings Limited. This gives them effective control of the company. So they have a HK$446m stake in this HK$787m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GT Gold Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - GT Gold Holdings has 3 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.