Institutions along with individual investors who hold considerable shares inSkillsoft Corp. (NYSE:SKIL) come under pressure; lose 11% of holdings value

Key Insights

• Significant control over Skillsoft by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 42% of the company
• Institutional ownership in Skillsoft is 36%

Every investor in Skillsoft Corp. (NYSE:SKIL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 36% shares weren’t spared from last week’s US$26m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Skillsoft.

View our latest analysis for Skillsoft

What Does The Institutional Ownership Tell Us About Skillsoft?

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.

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

Skillsoft is not owned by hedge funds. Paradice Investment Management Pty Ltd. is currently the company's largest shareholder with 7.5% of shares outstanding. The second and third largest shareholders are AREX Capital Management, LP and Michael Klein, with an equal amount of shares to their name at 4.1%. Michael Klein, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Ronald Hovsepian directly holds 0.8% of the total shares outstanding.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Skillsoft

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own some shares in Skillsoft Corp.. As individuals, the insiders collectively own US$17m worth of the US$223m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 54% of Skillsoft. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Skillsoft , and understanding them should be part of your investment process.

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.