Institutions profited after QuantumScape Corporation's (NYSE:QS) market cap rose US$101m last week but retail investors profited the most

Key Insights

• Significant control over QuantumScape by retail investors implies that the general public has more power to influence management and governance-related decisions
• 49% of the business is held by the top 25 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of QuantumScape Corporation (NYSE:QS), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s US$101m market cap gain, institutions too had a 28% share in those profits.

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

Check out our latest analysis for QuantumScape

What Does The Institutional Ownership Tell Us About QuantumScape?

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 QuantumScape 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. 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 QuantumScape's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in QuantumScape. Porsche Automobil Holding SE is currently the company's largest shareholder with 17% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 6.2% of common stock, and Jagdeep Singh holds about 4.0% of the company stock. Jagdeep Singh, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of QuantumScape

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.

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 QuantumScape Corporation. This is a big company, so it is good to see this level of alignment. Insiders own US$276m 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

The general public, who are usually individual investors, hold a 45% stake in QuantumScape. 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.

Public Company Ownership

We can see that public companies hold 17% of the QuantumScape shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. To that end, you should learn about the 5 warning signs we've spotted with QuantumScape (including 1 which doesn't sit too well with us) .

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.