Public companies invested in GMO Financial Gate, Inc. (TSE:4051) copped the brunt of last week's JP¥6.2b market cap decline

Key Insights

• GMO Financial Gate's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 57% of the company is held by a single shareholder (GMO Payment Gateway, Inc.)
• 17% of GMO Financial Gate is held by Institutions

If you want to know who really controls GMO Financial Gate, Inc. (TSE:4051), then you'll have to look at the makeup of its share registry. With 57% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, public companies endured the biggest losses as the stock fell by 10%.

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

See our latest analysis for GMO Financial Gate

What Does The Institutional Ownership Tell Us About GMO Financial Gate?

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 GMO Financial Gate does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of GMO Financial Gate, (below). Of course, keep in mind that there are other factors to consider, too.

GMO Financial Gate is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is GMO Payment Gateway, Inc. with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 5.5% and 3.0%, of the shares outstanding, respectively. In addition, we found that Kentaro Sugiyama, the CEO has 0.6% of the shares allocated to their name.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of GMO Financial Gate

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can see that insiders own shares in GMO Financial Gate, Inc.. In their own names, insiders own JP¥1.9b worth of stock in the JP¥56b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in GMO Financial Gate. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 57% of GMO Financial Gate. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand GMO Financial Gate better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with GMO Financial Gate , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.