Massimo Group's (NASDAQ:MAMO) largest shareholder, CEO David Shan sees holdings value fall by 12% following recent drop

Key Insights

• Significant insider control over Massimo Group implies vested interests in company growth
• The largest shareholder of the company is David Shan with a 77% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in Massimo Group (NASDAQ:MAMO) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 78% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to US$119m last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Massimo Group

What Does The Lack Of Institutional Ownership Tell Us About Massimo Group?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Massimo Group, for yourself, below.

We note that hedge funds don't have a meaningful investment in Massimo Group. Looking at our data, we can see that the largest shareholder is the CEO David Shan with 77% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 10% and 0.3% of the shares outstanding respectively, Asia International Securities Exchange Co., Ltd. and Yunhao Chen are the second and third largest shareholders. Interestingly, the third-largest shareholder, Yunhao Chen is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Massimo Group

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our information suggests that insiders own more than half of Massimo Group. This gives them effective control of the company. That means they own US$93m worth of shares in the US$119m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 10%, of the Massimo Group stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Massimo Group (1 is significant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.