Network18 Media & Investments Limited's (NSE:NETWORK18) market cap dropped ₹6.4b last week; Public companies bore the brunt

Key Insights

• The considerable ownership by public companies in Network18 Media & Investments indicates that they collectively have a greater say in management and business strategy
• Reliance Industries Limited owns 52% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Network18 Media & Investments Limited (NSE:NETWORK18) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 8.7% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Network18 Media & Investments.

View our latest analysis for Network18 Media & Investments

What Does The Institutional Ownership Tell Us About Network18 Media & Investments?

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.

We can see that Network18 Media & Investments does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Network18 Media & Investments' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Network18 Media & Investments. The company's largest shareholder is Reliance Industries Limited, with ownership of 52%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 4.5% and 3.7%, of the shares outstanding, respectively.

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

Insider Ownership Of Network18 Media & Investments

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.

Our data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 10%, of the Network18 Media & Investments stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 52% of Network18 Media & Investments stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. To that end, you should be aware of the 3 warning signs we've spotted with Network18 Media & Investments .

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.