Top Key Executive Keith Liddell, Lifezone Metals Limited's (NYSE:LZM) largest shareholder sees value of holdings go down 18% after recent drop

Key Insights

• Significant insider control over Lifezone Metals implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 53% ownership
• Institutional ownership in Lifezone Metals is 19%

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To get a sense of who is truly in control of Lifezone Metals Limited (NYSE:LZM), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 18% decline in share price, insiders suffered the most losses.

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

View our latest analysis for Lifezone Metals

What Does The Institutional Ownership Tell Us About Lifezone Metals?

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.

Lifezone Metals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Lifezone Metals' historic earnings and revenue below, but keep in mind there's always more to the story.

Lifezone Metals is not owned by hedge funds. Our data suggests that Keith Liddell, who is also the company's Top Key Executive, holds the most number of shares at 30%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 12% and 6.6% of the stock. Furthermore, CEO Chris Showalter is the owner of 4.0% of the company's shares.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of Lifezone Metals

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.

It seems that insiders own more than half the Lifezone Metals Limited stock. This gives them a lot of power. So they have a US$165m stake in this US$303m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lifezone Metals. 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 Company Ownership

Our data indicates that Private Companies hold 11%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Lifezone Metals better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Lifezone Metals (at least 3 which don't sit too well with us) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.