MediaTek Inc.'s (TWSE:2454) top owners are retail investors with 53% stake, while 40% is held by institutions

Key Insights

• The considerable ownership by retail investors in MediaTek indicates that they collectively have a greater say in management and business strategy
• 34% of the business is held by the top 25 shareholders
• Institutions own 40% of MediaTek

A look at the shareholders of MediaTek Inc. (TWSE:2454) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 40% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

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

Check out our latest analysis for MediaTek

What Does The Institutional Ownership Tell Us About MediaTek?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that MediaTek does have institutional investors; and they hold a good portion of the company's stock. 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 MediaTek's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in MediaTek. The company's largest shareholder is Ming-Kai Tsai, with ownership of 5.1%. With 3.3% and 2.6% of the shares outstanding respectively, BlackRock, Inc. and GIC Private Limited are the second and third largest shareholders.

On studying our ownership data, we found that 25 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. 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 MediaTek

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Shareholders would probably be interested to learn that insiders own shares in MediaTek Inc.. Insiders own NT$137b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of MediaTek shares. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for MediaTek you should know about.

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.