What Kind Of Shareholders Own Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH)?

By
Simply Wall St
Published
September 03, 2021
NasdaqGM:LBPH
Source: Shutterstock

If you want to know who really controls Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

Longboard Pharmaceuticals is a smaller company with a market capitalization of US$158m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Longboard Pharmaceuticals.

View our latest analysis for Longboard Pharmaceuticals

ownership-breakdown
NasdaqGM:LBPH Ownership Breakdown September 4th 2021

What Does The Institutional Ownership Tell Us About Longboard Pharmaceuticals?

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 Longboard Pharmaceuticals. 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 Longboard Pharmaceuticals' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGM:LBPH Earnings and Revenue Growth September 4th 2021

It would appear that 20% of Longboard Pharmaceuticals 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. Arena Pharmaceuticals, Inc. is currently the largest shareholder, with 23% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 20% and 13%, of the shares outstanding, respectively. In addition, we found that Kevin Lind, the CEO has 2.0% of the shares allocated to their name.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Longboard Pharmaceuticals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own some shares in Longboard Pharmaceuticals, Inc.. As individuals, the insiders collectively own US$3.2m worth of the US$158m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, with a 10% stake in the company, will not 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 Equity Ownership

With a stake of 11%, private equity firms could influence the Longboard Pharmaceuticals board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

Public companies currently own 23% of Longboard Pharmaceuticals 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Longboard Pharmaceuticals (of which 2 shouldn't be ignored!) you should know about.

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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