4iG Nyrt.'s (BUSE:4IG) market cap dropped Ft72b last week; Private equity firms bore the brunt

Key Insights

• 4iG Nyrt's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 2 investors have a majority stake in the company with 65% ownership
• Insiders own 13% of 4iG Nyrt

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If you want to know who really controls 4iG Nyrt. (BUSE:4IG), 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 private equity firms with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 5.5% decline in share price, private equity firms suffered the most losses.

In the chart below, we zoom in on the different ownership groups of 4iG Nyrt.

Check out our latest analysis for 4iG Nyrt

What Does The Lack Of Institutional Ownership Tell Us About 4iG Nyrt?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 4iG Nyrt 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 4iG Nyrt. iKON Investment Management Zrt. is currently the largest shareholder, with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 26% and 12% of the stock. Jaszai Zoltan, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of 4iG Nyrt

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.

Our information suggests that insiders maintain a significant holding in 4iG Nyrt.. Insiders own Ft156b worth of shares in the Ft1.2t company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in 4iG Nyrt. 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.

Private Equity Ownership

Private equity firms hold a 45% stake in 4iG Nyrt. This suggests they can be influential in key policy decisions. 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

Public companies currently own 26% of 4iG Nyrt stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand 4iG Nyrt better, we need to consider many other factors. For example, we've discovered 2 warning signs for 4iG Nyrt (1 shouldn't be ignored!) that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.