FinWise Bancorp's (NASDAQ:FINW) 11% gain last week benefited both individual investors who own 36% as well as insiders

Key Insights

• Significant control over FinWise Bancorp by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 13 shareholders own 51% of the company
• Insiders own 35% of FinWise Bancorp

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A look at the shareholders of FinWise Bancorp (NASDAQ:FINW) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched US$206m last week, while insiders who own 35% also benefitted.

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

See our latest analysis for FinWise Bancorp

What Does The Institutional Ownership Tell Us About FinWise Bancorp?

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.

As you can see, institutional investors have a fair amount of stake in FinWise Bancorp. 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 FinWise Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.

FinWise Bancorp is not owned by hedge funds. With a 8.4% stake, CEO Kent Landvatter is the largest shareholder. In comparison, the second and third largest shareholders hold about 6.6% and 6.1% of the stock.

After doing some more digging, we found that the top 13 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of FinWise Bancorp

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.

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.

Our information suggests that insiders maintain a significant holding in FinWise Bancorp. Insiders own US$73m worth of shares in the US$206m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over FinWise Bancorp. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand FinWise Bancorp better, we need to consider many other factors. For example, we've discovered 1 warning sign for FinWise Bancorp that you should be aware of before investing here.

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.