Institutions profited after BioXcel Therapeutics, Inc.'s (NASDAQ:BTAI) market cap rose US$43m last week but retail investors profited the most

Key Insights

• Significant control over BioXcel Therapeutics by retail investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 8 shareholders
• 32% of BioXcel Therapeutics is held by Institutions

Every investor in BioXcel Therapeutics, Inc. (NASDAQ:BTAI) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 66% price gain, institutions also received a 32% cut.

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

See our latest analysis for BioXcel Therapeutics

What Does The Institutional Ownership Tell Us About BioXcel Therapeutics?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that BioXcel Therapeutics does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 BioXcel Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in BioXcel Therapeutics. The company's largest shareholder is BioXcel Corporation, with ownership of 28%. Meanwhile, the second and third largest shareholders, hold 8.3% and 4.5%, of the shares outstanding, respectively.

We also observed that the top 8 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of BioXcel Therapeutics

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that BioXcel Therapeutics, Inc. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about US$1.1m worth of stock. This compares to a market capitalization of US$107m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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 28%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for BioXcel Therapeutics (of which 2 are significant!) 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.