Sinch AB (publ)'s (STO:SINCH) market cap dropped kr1.1b last week; individual investors who hold 40% were hit as were institutions

Key Insights

• Significant control over Sinch by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 8 shareholders
• Insiders have bought recently

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To get a sense of who is truly in control of Sinch AB (publ) (STO:SINCH), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.9% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 40% stock also took a hit.

Let's delve deeper into each type of owner of Sinch, beginning with the chart below.

Check out our latest analysis for Sinch

What Does The Institutional Ownership Tell Us About Sinch?

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.

Sinch 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 Sinch's historic earnings and revenue below, but keep in mind there's always more to the story.

Sinch is not owned by hedge funds. Our data shows that Neqst D1 AB is the largest shareholder with 18% of shares outstanding. With 8.9% and 5.9% of the shares outstanding respectively, Fourth Swedish National Pension Fund (AP4) and Swedbank Robur Fonder AB are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Sinch

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 some shares in Sinch AB (publ). It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around kr496m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 40% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 18%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

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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.