Private companies invested in Namib Minerals (NASDAQ:NAMM) copped the brunt of last week's US$80m market cap decline

Key Insights

• The considerable ownership by private companies in Namib Minerals indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is The Southern SelliBen Trust with a 59% stake
• Insider ownership in Namib Minerals is 22%

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If you want to know who really controls Namib Minerals (NASDAQ:NAMM), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 18% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 22% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Namib Minerals.

See our latest analysis for Namib Minerals

What Does The Lack Of Institutional Ownership Tell Us About Namib Minerals?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Namib Minerals, for yourself, below.

Hedge funds don't have many shares in Namib Minerals. The company's largest shareholder is The Southern SelliBen Trust, with ownership of 59%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 8.5% and 8.4% of the stock. Tulani Sikwila, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Ibrahima Tall, the CEO has 3.4% of the shares allocated to their name.

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 Namib Minerals

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.

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 Namib Minerals. It has a market capitalization of just US$459m, and insiders have US$101m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Namib Minerals. 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.

Private Equity Ownership

With an ownership of 6.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 59%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 5 warning signs we've spotted with Namib Minerals (including 4 which shouldn't be ignored) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.