Genelux Corporation's (NASDAQ:GNLX) market cap dropped US$26m last week; Retail investors bore the brunt

Key Insights

• Significant control over Genelux by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 44% of the company
• Insiders own 24% of Genelux

A look at the shareholders of Genelux Corporation (NASDAQ:GNLX) can tell us which group is most powerful. With 54% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 24% shares weren’t spared from last week’s US$26m market cap drop, retail investors as a group suffered the maximum losses

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

Check out our latest analysis for Genelux

What Does The Institutional Ownership Tell Us About Genelux?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Genelux. 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. 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 Genelux's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Genelux. The company's largest shareholder is Aladar Szalay, with ownership of 16%. In comparison, the second and third largest shareholders hold about 4.9% and 4.1% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Genelux

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 insiders maintain a significant holding in Genelux Corporation. It has a market capitalization of just US$170m, and insiders have US$42m 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 54% of Genelux. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Genelux better, we need to consider many other factors. Be aware that Genelux is showing 4 warning signs in our investment analysis , and 1 of those is significant...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.