- United States
- Aerospace & Defense
Individual investors who have a significant stake must be disappointed along with institutions after Virgin Galactic Holdings, Inc.'s (NYSE:SPCE) market cap dropped by US$132m
- The considerable ownership by individual investors in Virgin Galactic Holdings indicates that they collectively have a greater say in management and business strategy
- 49% of the business is held by the top 25 shareholders
- Institutions own 35% of Virgin Galactic Holdings
A look at the shareholders of Virgin Galactic Holdings, Inc. (NYSE:SPCE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 46% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 9.2% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 35% stock also took a hit.
Let's delve deeper into each type of owner of Virgin Galactic Holdings, beginning with the chart below.
See our latest analysis for Virgin Galactic Holdings
What Does The Institutional Ownership Tell Us About Virgin Galactic Holdings?
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.
Virgin Galactic Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Virgin Galactic Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Virgin Galactic Holdings. Virgin Group Holdings Limited is currently the largest shareholder, with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.1% and 7.0% of the stock.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 Virgin Galactic Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 Virgin Galactic Holdings, Inc.. The insiders have a meaningful stake worth US$45m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 46% stake in Virgin Galactic Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 15%, of the shares on issue. 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Virgin Galactic Holdings better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for Virgin Galactic Holdings you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
Virgin Galactic Holdings
Virgin Galactic Holdings, Inc. focuses on the development, manufacture, and operation of spaceships and related technologies for conducting commercial human spaceflight and flying commercial research and development payloads into space.
Excellent balance sheet with limited growth.