Retail investors among Mobvoi Inc.'s (HKG:2438) largest stockholders and were hit after last week's 10% price drop

Key Insights

• Mobvoi's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 4 shareholders own 53% of the company
• 30% of Mobvoi is held by insiders

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To get a sense of who is truly in control of Mobvoi Inc. (HKG:2438), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 30% came under pressure after market cap dropped to HK$939m last week,retail investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Mobvoi.

View our latest analysis for Mobvoi

What Does The Institutional Ownership Tell Us About Mobvoi?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Mobvoi. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Mobvoi's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Mobvoi. Looking at our data, we can see that the largest shareholder is the CEO Zhifei Li with 24% of shares outstanding. SIG Asia Investments, LLLP is the second largest shareholder owning 16% of common stock, and Goertek Inc. holds about 7.9% of the company stock.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Mobvoi

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Mobvoi Inc.. Insiders own HK$281m worth of shares in the HK$939m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 34% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

With a stake of 16%, private equity firms could influence the Mobvoi board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Public Company Ownership

It appears to us that public companies own 13% of Mobvoi. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Mobvoi better, we need to consider many other factors. Be aware that Mobvoi is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.