The recent HK$366m market cap decrease is likely to have disappointed insiders invested in International Business Digital Technology Limited (HKG:1782)

Key Insights

• Insiders appear to have a vested interest in International Business Digital Technology's growth, as seen by their sizeable ownership
• Li Du owns 75% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in International Business Digital Technology Limited (HKG:1782) should be aware of the most powerful shareholder groups. With 75% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by HK$366m.

In the chart below, we zoom in on the different ownership groups of International Business Digital Technology.

View our latest analysis for International Business Digital Technology

What Does The Lack Of Institutional Ownership Tell Us About International Business Digital Technology?

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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. International Business Digital Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

International Business Digital Technology is not owned by hedge funds. Li Du is currently the company's largest shareholder with 75% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company.

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. 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 International Business Digital Technology

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.

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.

It seems that insiders own more than half the International Business Digital Technology Limited stock. This gives them a lot of power. Given it has a market cap of HK$2.9b, that means they have HK$2.2b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in International Business Digital Technology. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand International Business Digital Technology better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for International Business Digital Technology you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.