Public companies are Dada Nexus Limited's (NASDAQ:DADA) biggest owners and were rewarded after market cap rose by US$122m last week

Key Insights

• The considerable ownership by public companies in Dada Nexus indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is JD.com, Inc. with a 63% stake
• Institutions own 10% of Dada Nexus

A look at the shareholders of Dada Nexus Limited (NASDAQ:DADA) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 63% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies were the biggest beneficiaries of last week’s 35% gain.

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

Check out our latest analysis for Dada Nexus

What Does The Institutional Ownership Tell Us About Dada Nexus?

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.

Dada Nexus 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 Dada Nexus' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Dada Nexus. Looking at our data, we can see that the largest shareholder is JD.com, Inc. with 63% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. DST Global is the second largest shareholder owning 2.5% of common stock, and Rovida Advisors Inc. holds about 1.8% of the company stock.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Dada Nexus

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.

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Dada Nexus. 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 63% of the Dada Nexus shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Be aware that Dada Nexus is showing 2 warning signs in our investment analysis , 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.