Retail investors invested in INmune Bio, Inc. (NASDAQ:INMB) copped the brunt of last week's US$27m market cap decline

Key Insights

• Significant control over INmune Bio by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 44% ownership
• Recent purchases by insiders

To get a sense of who is truly in control of INmune Bio, Inc. (NASDAQ:INMB), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 23% came under pressure after market cap dropped to US$152m last week,retail investors took the most losses.

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

See our latest analysis for INmune Bio

What Does The Institutional Ownership Tell Us About INmune Bio?

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.

We can see that INmune Bio does have institutional investors; and they hold a good portion of the company's stock. 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. 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 INmune Bio, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in INmune Bio. Looking at our data, we can see that the largest shareholder is Xencor, Inc. with 9.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.8% and 7.6%, of the shares outstanding, respectively. Raymond Tesi, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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.

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 INmune Bio

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 INmune Bio, Inc.. Insiders have a US$35m stake in this US$152m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of INmune Bio shares. 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.

Public Company Ownership

Public companies currently own 9.5% of INmune Bio stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand INmune Bio better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for INmune Bio you should be aware of, and 1 of them is potentially serious.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com