WISEnut, Inc.'s (KOSDAQ:096250) market cap dropped ₩26b last week; Individual investors bore the brunt

Key Insights

• Significant control over WISEnut by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 6 investors have a majority stake in the company with 48% ownership
• Insider ownership in WISEnut is 33%

We've discovered 2 warning signs about WISEnut. View them for free.

To get a sense of who is truly in control of WISEnut, Inc. (KOSDAQ:096250), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 33% came under pressure after market cap dropped to ₩182b last week,individual investors took the most losses.

In the chart below, we zoom in on the different ownership groups of WISEnut.

View our latest analysis for WISEnut

What Does The Lack Of Institutional Ownership Tell Us About WISEnut?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of WISEnut, for yourself, below.

WISEnut is not owned by hedge funds. Yeogirl Yun is currently the company's largest shareholder with 23% of shares outstanding. With 15% and 6.2% of the shares outstanding respectively, Solborn Investment, Inc. and Gwang-Il An are the second and third largest shareholders. Additionally, the company's CEO Kang Yong-Seong directly holds 2.9% of the total shares outstanding.

On studying our ownership data, we found that 6 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 WISEnut

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 WISEnut, Inc.. Insiders have a ₩60b stake in this ₩182b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 52% of WISEnut. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With a stake of 15%, private equity firms could influence the WISEnut board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for WISEnut that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.