Following recent decline, LiveChat Software S.A.'s (WSE:LVC) top shareholder CEO Mariusz Cieply Warm sees holdings value drop by 5.9%

Key Insights

• Significant insider control over LiveChat Software implies vested interests in company growth
• The top 6 shareholders own 54% of the company
• Institutional ownership in LiveChat Software is 35%

Every investor in LiveChat Software S.A. (WSE:LVC) should be aware of the most powerful shareholder groups. With 39% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 5.9% decline in share price, insiders suffered the most losses.

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

View our latest analysis for LiveChat Software

What Does The Institutional Ownership Tell Us About LiveChat Software?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

LiveChat Software already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see LiveChat Software's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in LiveChat Software. The company's CEO Mariusz Cieply Warm is the largest shareholder with 13% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 9.2%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Maciej Jarzebowski is also a Chairman of Supervisory Board, again, indicating strong insider ownership amongst the company's top shareholders.

We did some more digging and found that 6 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of LiveChat Software

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our information suggests that insiders maintain a significant holding in LiveChat Software S.A.. Insiders have a zł1.3b stake in this zł3.4b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LiveChat Software. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Be aware that LiveChat Software is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

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.