Retail investors who have a significant stake must be disappointed along with institutions after Solid Power, Inc.'s (NASDAQ:SLDP) market cap dropped by US$22m

Key Insights

• The considerable ownership by retail investors in Solid Power indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 38% ownership
• Institutions own 26% of Solid Power

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Every investor in Solid Power, Inc. (NASDAQ:SLDP) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 12% price drop, institutions with their 26% holdings also suffered.

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

Check out our latest analysis for Solid Power

What Does The Institutional Ownership Tell Us About Solid Power?

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.

As you can see, institutional investors have a fair amount of stake in Solid Power. 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. 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 Solid Power'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 Solid Power. Ford Motor Company is currently the largest shareholder, with 6.4% of shares outstanding. For context, the second largest shareholder holds about 6.0% of the shares outstanding, followed by an ownership of 5.8% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Solid Power

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.

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 Solid Power, Inc.. It has a market capitalization of just US$177m, and insiders have US$5.4m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 58% of Solid Power. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Public Company Ownership

We can see that public companies hold 12% of the Solid Power shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Solid Power 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.