Skillz Inc. (NYSE:SKLZ) insiders have recently purchased stock and their bets paid off last week as company hit US$108m market cap

Key Insights

• Significant insider control over Skillz implies vested interests in company growth
• 51% of the business is held by the top 4 shareholders
• Insiders have been buying lately

Every investor in Skillz Inc. (NYSE:SKLZ) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Having purchased shares recently, insiders must be glad after market cap hit US$108m last week.

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

View our latest analysis for Skillz

What Does The Institutional Ownership Tell Us About Skillz?

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.

We can see that Skillz does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Skillz, (below). Of course, keep in mind that there are other factors to consider, too.

Skillz is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Andrew Paradise with 35% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.7% and 5.4%, of the shares outstanding, respectively.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Skillz

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.

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 Skillz Inc.. It has a market capitalization of just US$108m, and insiders have US$47m 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-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. 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

Private equity firms hold a 5.4% stake in Skillz. This suggests they can be influential in key policy decisions. 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 Skillz better, we need to consider many other factors. Take risks for example - Skillz has 2 warning signs we think 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.

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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.