Retail investors are Solowin Holdings' (NASDAQ:SWIN) biggest owners and were hit after market cap dropped US$41m

Key Insights

• Solowin Holdings' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 12 shareholders own 27% of the company
• Insider ownership in Solowin Holdings is 42%

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To get a sense of who is truly in control of Solowin Holdings (NASDAQ:SWIN), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 20% price drop, insiders with their 42% also suffered.

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

View our latest analysis for Solowin Holdings

What Does The Lack Of Institutional Ownership Tell Us About Solowin Holdings?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Solowin Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Solowin Holdings is not owned by hedge funds. With a 8.2% stake, CEO Ling Ngai Lok is the largest shareholder. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 12 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Solowin Holdings

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Solowin Holdings. Insiders own US$69m worth of shares in the US$163m company. 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 -- including retail investors -- own 58% of Solowin Holdings. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Solowin Holdings is showing 4 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

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.