Orum Therapeutics, Inc.'s (KOSDAQ:475830) market cap touched ₩1.3t last week, benefiting both retail investors who own 54% as well as institutions

Key Insights

• Significant control over Orum Therapeutics by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 19 investors have a majority stake in the company with 46% ownership
• 16% of Orum Therapeutics is held by insiders

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A look at the shareholders of Orum Therapeutics, Inc. (KOSDAQ:475830) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s ₩123b market cap gain, institutions too had a 20% share in those profits.

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

View our latest analysis for Orum Therapeutics

What Does The Institutional Ownership Tell Us About Orum Therapeutics?

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.

As you can see, institutional investors have a fair amount of stake in Orum Therapeutics. 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 Orum Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Orum Therapeutics. The company's CEO Sung-Joo Lee is the largest shareholder with 16% of shares outstanding. With 9.2% and 4.7% of the shares outstanding respectively, InterVest Co., Ltd. and The Korea Development Bank are the second and third largest shareholders.

Our studies suggest that the top 19 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.

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

Insider Ownership Of Orum Therapeutics

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.

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 most recent data indicates that insiders own a reasonable proportion of Orum Therapeutics, Inc.. Insiders own ₩218b worth of shares in the ₩1.3t company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of Orum Therapeutics 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.

Private Equity Ownership

With an ownership of 9.2%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Orum Therapeutics has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.