Pyrum Innovations AG's (OB:PYRUM) stock price dropped 17% last week; retail investors would not be happy

Key Insights

• Significant control over Pyrum Innovations by retail investors implies that the general public has more power to influence management and governance-related decisions
• 47% of the business is held by the top 20 shareholders
• Insiders own 19% of Pyrum Innovations

If you want to know who really controls Pyrum Innovations AG (OB:PYRUM), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of retail investors took a hit after last week’s 17% price drop, insiders with their 19% also suffered.

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

View our latest analysis for Pyrum Innovations

What Does The Institutional Ownership Tell Us About Pyrum Innovations?

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.

Less than 5% of Pyrum Innovations is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Pyrum Innovations. The company's largest shareholder is Amel Holding S.A., with ownership of 10%. Meanwhile, the second and third largest shareholders, hold 10.0% and 8.0%, of the shares outstanding, respectively. Two of the top three shareholders happen to be Chief Executive Officer and Member of Supervisory Board, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

Our studies suggest that the top 20 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Pyrum Innovations

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Pyrum Innovations AG. Insiders own kr237m worth of shares in the kr1.2b company. 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 53% of Pyrum Innovations. 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 Company Ownership

We can see that Private Companies own 17%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

We can see that public companies hold 7.9% of the Pyrum Innovations shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Pyrum Innovations better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Pyrum Innovations (including 1 which is potentially serious) .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.