Bora Pharmaceuticals Co., LTD.'s (TWSE:6472) market cap dropped NT$3.6b last week; Retail investors bore the brunt

Key Insights

• Significant control over Bora Pharmaceuticals by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 10 shareholders own 51% of the company
• 11% of Bora Pharmaceuticals is held by Institutions

To get a sense of who is truly in control of Bora Pharmaceuticals Co., LTD. (TWSE:6472), 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 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 4.9% decline in share price, retail investors suffered the most losses.

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

Check out our latest analysis for Bora Pharmaceuticals

What Does The Institutional Ownership Tell Us About Bora Pharmaceuticals?

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.

Bora Pharmaceuticals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Bora Pharmaceuticals' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Bora Pharmaceuticals. Our data shows that BaoLei International Limited is the largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 6.8% of the stock. Pao-Shi Sheng, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bora Pharmaceuticals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Bora Pharmaceuticals Co., LTD.. The insiders have a meaningful stake worth NT$5.8b. Most would see this as a real positive. 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

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bora Pharmaceuticals. 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 36%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bora Pharmaceuticals better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Bora Pharmaceuticals you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.