Individual investors among Orchestra BioMed Holdings, Inc.'s (NASDAQ:OBIO) largest stockholders and were hit after last week's 11% price drop

Key Insights

• The considerable ownership by individual investors in Orchestra BioMed Holdings indicates that they collectively have a greater say in management and business strategy
• 54% of the business is held by the top 4 shareholders
• Recent purchases by insiders

To get a sense of who is truly in control of Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 26% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to US$205m last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Orchestra BioMed Holdings

What Does The Institutional Ownership Tell Us About Orchestra BioMed Holdings?

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.

Orchestra BioMed Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Orchestra BioMed Holdings' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 22% of Orchestra BioMed Holdings. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. RTW Investments, LP is currently the company's largest shareholder with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 12% of the stock. Furthermore, CEO David Hochman is the owner of 1.1% of the company's shares.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Orchestra BioMed Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in Orchestra BioMed Holdings, Inc.. As individuals, the insiders collectively own US$6.8m worth of the US$205m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Orchestra BioMed Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 12%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Public Company Ownership

Public companies currently own 15% of Orchestra BioMed Holdings stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Orchestra BioMed Holdings you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.