Siebert Financial Corp.'s (NASDAQ:SIEB) market cap dropped US$33m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Siebert Financial indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 52% ownership
• 21% of Siebert Financial is held by insiders

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A look at the shareholders of Siebert Financial Corp. ( NASDAQ:SIEB ) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 32% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 17% decline in share price, retail investors suffered the most losses.

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

View our latest analysis for Siebert Financial

What Does The Institutional Ownership Tell Us About Siebert Financial?

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 Siebert Financial does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Siebert Financial, (below). Of course, keep in mind that there are other factors to consider, too.

Siebert Financial is not owned by hedge funds. Gebbia Living Trust is currently the largest shareholder, with 24% of shares outstanding. This is followed closely by the second largest shareholder, Kakaopay Corp. holding 20% of shares outstanding. Meanwhile, the third largest shareholder holds 8.5% of the shares outstanding. 

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Siebert Financial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own a reasonable proportion of Siebert Financial Corp.. It has a market capitalization of just US$163m, and insiders have US$35m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 32% stake in Siebert Financial. 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 24%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Siebert Financial better, we need to consider many other factors.

I always like to check for a history of revenue growth . You can too, by accessing this free chart of historic revenue and earnings in this detailed graph .

Of course this may not be the best stock to buy . Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.