Institutions profited after Alpha Cognition Inc.'s (NASDAQ:ACOG) market cap rose US$12m last week but retail investors profited the most

Key Insights

• Significant control over Alpha Cognition by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 20 shareholders
• Insiders own 13% of Alpha Cognition

If you want to know who really controls Alpha Cognition Inc. (NASDAQ:ACOG), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% 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 13% increase in the stock price last week, retail investors profited the most, but institutions who own 31% stock also stood to gain from the increase.

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

Check out our latest analysis for Alpha Cognition

What Does The Institutional Ownership Tell Us About Alpha Cognition?

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.

As you can see, institutional investors have a fair amount of stake in Alpha Cognition. 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. 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 Alpha Cognition's historic earnings and revenue below, but keep in mind there's always more to the story.

It would appear that 8.7% of Alpha Cognition shares are controlled by hedge funds. 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. Solas Capital Management, LLC is currently the company's largest shareholder with 8.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.1% and 4.7% of the stock.

A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Alpha Cognition

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.

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.

It seems insiders own a significant proportion of Alpha Cognition Inc.. It has a market capitalization of just US$102m, and insiders have US$13m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 46% stake in Alpha Cognition. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 5 warning signs for Alpha Cognition (4 are concerning) that 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.