Individual investors invested in GlycoMimetics, Inc. (NASDAQ:GLYC) copped the brunt of last week's US$29m market cap decline

Key Insights

• The considerable ownership by individual investors in GlycoMimetics indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 11 shareholders
• Institutions own 19% of GlycoMimetics

To get a sense of who is truly in control of GlycoMimetics, Inc. (NASDAQ:GLYC), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to US$118m last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for GlycoMimetics

What Does The Institutional Ownership Tell Us About GlycoMimetics?

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 GlycoMimetics 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at GlycoMimetics' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 15% of GlycoMimetics. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is BVF Partners L.P. with 15% of shares outstanding. With 13% and 6.2% of the shares outstanding respectively, Artal Group S.A. and New Enterprise Associates, Inc. are the second and third largest shareholders.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of GlycoMimetics

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. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in GlycoMimetics, Inc.. In their own names, insiders own US$3.6m worth of stock in the US$118m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GlycoMimetics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 20% stake in GlycoMimetics. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that GlycoMimetics is showing 2 warning signs in our investment analysis , and 1 of those is significant...

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.