Golden Matrix Group, Inc.'s (NASDAQ:GMGI) market cap up US$17m last week, benefiting both retail investors who own 45% as well as insiders

Key Insights

• Significant control over Golden Matrix Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 51% of the company
• Insider ownership in Golden Matrix Group is 32%

To get a sense of who is truly in control of Golden Matrix Group, Inc. (NASDAQ:GMGI), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 16% increase in the stock price last week, retail investors profited the most, but insiders who own 32% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Golden Matrix Group.

See our latest analysis for Golden Matrix Group

What Does The Institutional Ownership Tell Us About Golden Matrix Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Since institutions own only a small portion of Golden Matrix Group, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

It looks like hedge funds own 20% of Golden Matrix Group shares. 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. Looking at our data, we can see that the largest shareholder is the CEO Anthony Goodman with 23% of shares outstanding. Luxor Capital Group, LP is the second largest shareholder owning 20% of common stock, and Weiting Feng holds about 7.6% of the company stock. Interestingly, the third-largest shareholder, Weiting Feng is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Golden Matrix Group

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Golden Matrix Group, Inc.. Insiders have a US$40m stake in this US$124m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders 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 Golden Matrix Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Golden Matrix Group has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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.