Public companies invested in Tera Probe, Inc. (TSE:6627) copped the brunt of last week's JP¥3.0b market cap decline

Key Insights

• Significant control over Tera Probe by public companies implies that the general public has more power to influence management and governance-related decisions
• Powertech Technology Inc. owns 61% of the company
• Institutions own 11% of Tera Probe

Every investor in Tera Probe, Inc. (TSE:6627) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 61% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to JP¥26b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Tera Probe, beginning with the chart below.

View our latest analysis for Tera Probe

What Does The Institutional Ownership Tell Us About Tera Probe?

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 Tera Probe does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Tera Probe, (below). Of course, keep in mind that there are other factors to consider, too.

Tera Probe is not owned by hedge funds. Powertech Technology Inc. is currently the company's largest shareholder with 61% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 4.2% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Tera Probe

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.

Shareholders would probably be interested to learn that insiders own shares in Tera Probe, Inc.. As individuals, the insiders collectively own JP¥494m worth of the JP¥26b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 27% 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.

Public Company Ownership

We can see that public companies hold 61% of the Tera Probe shares on issue. 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 Tera Probe better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Tera Probe .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.