LifeMD, Inc.'s (NASDAQ:LFMD) 29% loss last week hit both individual investors who own 45% as well as institutions

Key Insights

• LifeMD's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 44% of the company
• Insiders have been selling lately

A look at the shareholders of LifeMD, Inc. (NASDAQ:LFMD) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 37% shares weren’t spared from last week’s US$95m market cap drop, individual investors as a group suffered the maximum losses

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

Check out our latest analysis for LifeMD

What Does The Institutional Ownership Tell Us About LifeMD?

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 LifeMD 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 LifeMD, (below). Of course, keep in mind that there are other factors to consider, too.

LifeMD is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Justin Schreiber with 6.7% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 5.9% of common stock, and The Vanguard Group, Inc. holds about 4.1% of the company stock.

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 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 LifeMD

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders maintain a significant holding in LifeMD, Inc.. Insiders have a US$33m stake in this US$236m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LifeMD. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 3.9%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Take risks for example - LifeMD has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.