Public companies are WT Microelectronics Co., Ltd.'s (TWSE:3036) biggest owners and were hit after market cap dropped NT$8.4b

Key Insights

• The considerable ownership by public companies in WT Microelectronics indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 53% of the company
• Institutional ownership in WT Microelectronics is 19%

To get a sense of who is truly in control of WT Microelectronics Co., Ltd. (TWSE:3036), it is important to understand the ownership structure of the business. With 39% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, public companies endured the biggest losses as the stock fell by 6.3%.

In the chart below, we zoom in on the different ownership groups of WT Microelectronics.

View our latest analysis for WT Microelectronics

What Does The Institutional Ownership Tell Us About WT Microelectronics?

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.

WT Microelectronics 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. 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 WT Microelectronics' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in WT Microelectronics. Our data shows that ASUSTeK Computer Inc. is the largest shareholder with 21% of shares outstanding. With 17% and 9.7% of the shares outstanding respectively, WPG Holdings Limited and Shao Yang Investment Co., Ltd. are the second and third largest shareholders. Furthermore, CEO Wen-Tsung Cheng is the owner of 2.8% of the company's shares.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 WT Microelectronics

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.

We can see that insiders own shares in WT Microelectronics Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around NT$5.6b 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

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over WT Microelectronics. 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

It seems that Private Companies own 14%, of the WT Microelectronics stock. 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

It appears to us that public companies own 39% of WT Microelectronics. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 WT Microelectronics is showing 3 warning signs in our investment analysis , you should know about...

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.