GMO GlobalSign Holdings K.K.'s (TSE:3788) stock price dropped 13% last week; public companies would not be happy

Key Insights

• The considerable ownership by public companies in GMO GlobalSign Holdings K.K indicates that they collectively have a greater say in management and business strategy
• 52% of the company is held by a single shareholder (GMO internet group, Inc.)
• Institutions own 17% of GMO GlobalSign Holdings K.K

If you want to know who really controls GMO GlobalSign Holdings K.K. (TSE:3788), then you'll have to look at the makeup of its share registry. With 52% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies as a group endured the highest losses last week after market cap fell by JP¥4.3b.

In the chart below, we zoom in on the different ownership groups of GMO GlobalSign Holdings K.K.

Check out our latest analysis for GMO GlobalSign Holdings K.K

What Does The Institutional Ownership Tell Us About GMO GlobalSign Holdings K.K?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

GMO GlobalSign Holdings K.K already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at GMO GlobalSign Holdings K.K's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in GMO GlobalSign Holdings K.K. GMO internet group, Inc. is currently the company's largest shareholder with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 6.8% and 5.3% of the stock. Mitsuru Aoyama, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of GMO GlobalSign Holdings K.K

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 GlobalSign Holdings K.K.. In their own names, insiders own JP¥2.1b worth of stock in the JP¥29b company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GMO GlobalSign Holdings K.K. 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.

Public Company Ownership

We can see that public companies hold 52% of the GMO GlobalSign Holdings K.K shares on issue. 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 GMO GlobalSign Holdings K.K better, we need to consider many other factors. For instance, we've identified 1 warning sign for GMO GlobalSign Holdings K.K that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.