CARsgen Therapeutics Holdings Limited's (HKG:2171) stock price dropped 6.5% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in CARsgen Therapeutics Holdings indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 9 shareholders
• Institutions own 14% of CARsgen Therapeutics Holdings

If you want to know who really controls CARsgen Therapeutics Holdings Limited (HKG:2171), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to HK$5.7b last week, retail investors would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for CARsgen Therapeutics Holdings

What Does The Institutional Ownership Tell Us About CARsgen Therapeutics Holdings?

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 CARsgen Therapeutics Holdings. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at CARsgen Therapeutics Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in CARsgen Therapeutics Holdings. Yijie Biotech Holdings Limited is currently the company's largest shareholder with 36% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.9% and 2.4%, of the shares outstanding, respectively.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of CARsgen Therapeutics Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in CARsgen Therapeutics Holdings Limited. It has a market capitalization of just HK$5.7b, and insiders have HK$201m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over CARsgen Therapeutics Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 36%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CARsgen Therapeutics Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for CARsgen Therapeutics Holdings (of which 2 are a bit unpleasant!) you should know about.

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.