Ginkgo Bioworks Holdings, Inc.'s (NYSE:DNA) recent 14% pullback adds to one-year year losses, institutional owners may take drastic measures

Key Insights

• Institutions' substantial holdings in Ginkgo Bioworks Holdings implies that they have significant influence over the company's share price
• A total of 10 investors have a majority stake in the company with 53% ownership
• Insiders have been selling lately

A look at the shareholders of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$638m last week after a 14% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 87% might not go down well especially with this category of shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell Ginkgo Bioworks Holdings, which might have negative implications on individual investors.

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

View our latest analysis for Ginkgo Bioworks Holdings

What Does The Institutional Ownership Tell Us About Ginkgo Bioworks 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.

Ginkgo Bioworks 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 Ginkgo Bioworks Holdings' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 6.4% of Ginkgo Bioworks Holdings. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is ARK Investment Management LLC, with ownership of 8.5%. Meanwhile, the second and third largest shareholders, hold 6.8% and 6.4%, of the shares outstanding, respectively. Furthermore, CEO Jason Kelly is the owner of 3.8% of the company's shares.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Ginkgo Bioworks Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Ginkgo Bioworks Holdings, Inc.. It has a market capitalization of just US$638m, and insiders have US$107m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 24% stake in Ginkgo Bioworks Holdings. 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 Equity Ownership

With a stake of 6.8%, private equity firms could influence the Ginkgo Bioworks Holdings board. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ginkgo Bioworks Holdings better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Ginkgo Bioworks Holdings you should be aware of, and 1 of them is significant.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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