NIO Inc.'s (NYSE:NIO) largest shareholders are retail investors who were rewarded as market cap surged US$1.1b last week

Key Insights

• The considerable ownership by retail investors in NIO indicates that they collectively have a greater say in management and business strategy
• 49% of the business is held by the top 25 shareholders
• 18% of NIO is held by Institutions

Every investor in NIO Inc. (NYSE:NIO) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors collectively scored the highest last week as the company hit US$8.6b market cap following a 15% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about NIO.

See our latest analysis for NIO

What Does The Institutional Ownership Tell Us About NIO?

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 NIO. 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 NIO's historic earnings and revenue below, but keep in mind there's always more to the story.

NIO is not owned by hedge funds. Our data shows that Abu Dhabi (Emirate of) is the largest shareholder with 20% of shares outstanding. With 8.0% and 7.8% of the shares outstanding respectively, William Li and Tencent Holdings Limited are the second and third largest shareholders. William Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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

Insider Ownership Of NIO

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in NIO Inc.. Insiders own US$687m worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 46% 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.

Public Company Ownership

We can see that public companies hold 7.8% of the NIO 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. Take risks for example - NIO has 2 warning signs we think you should be aware of.

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.