Institutions profited after JYP Entertainment Corporation's (KOSDAQ:035900) market cap rose ₩142b last week but retail investors profited the most

Key Insights

• The considerable ownership by retail investors in JYP Entertainment indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 40% ownership
• Insider ownership in JYP Entertainment is 17%

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A look at the shareholders of JYP Entertainment Corporation (KOSDAQ:035900) can tell us which group is most powerful. With 58% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week’s ₩142b market cap gain, institutions too had a 25% share in those profits.

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

Check out our latest analysis for JYP Entertainment

What Does The Institutional Ownership Tell Us About JYP Entertainment?

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.

JYP Entertainment already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 JYP Entertainment's earnings history below. Of course, the future is what really matters.

JYP Entertainment is not owned by hedge funds. From our data, we infer that the largest shareholder is Jin-Young Park (who also holds the title of Senior Key Executive) with 16% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 4.3% of the shares outstanding, followed by an ownership of 3.0% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of JYP Entertainment

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. 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.

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.

It seems insiders own a significant proportion of JYP Entertainment Corporation. It is very interesting to see that insiders have a meaningful ₩415b stake in this ₩2.4t business. 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, mostly comprising of individual investors, collectively holds 58% of JYP Entertainment shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JYP Entertainment 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 JYP Entertainment , 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.