While institutions invested in Planet Labs PBC (NYSE:PL) benefited from last week's 16% gain, retail investors stood to gain the most

Key Insights

• The considerable ownership by retail investors in Planet Labs PBC indicates that they collectively have a greater say in management and business strategy
• A total of 19 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Planet Labs PBC is 30%

To get a sense of who is truly in control of Planet Labs PBC (NYSE:PL), 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 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that benefitted the most from last week’s US$87m market cap gain, institutions too had a 30% share in those profits.

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

See our latest analysis for Planet Labs PBC

What Does The Institutional Ownership Tell Us About Planet Labs PBC?

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 Planet Labs PBC does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Planet Labs PBC, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Planet Labs PBC. The company's largest shareholder is Alphabet Inc., with ownership of 11%. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 6.4% by the third-largest shareholder. Additionally, the company's CEO William Marshall directly holds 3.8% of the total shares outstanding.

After doing some more digging, we found that the top 19 have the combined ownership of 50% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Planet Labs PBC

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.

Shareholders would probably be interested to learn that insiders own shares in Planet Labs PBC. In their own names, insiders own US$55m worth of stock in the US$587m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. 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.

Private Equity Ownership

With a stake of 8.0%, private equity firms could influence the Planet Labs PBC board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

We can see that public companies hold 11% of the Planet Labs PBC shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 2 warning signs for Planet Labs PBC you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com