Recent 11% pullback would hurt Cartesian Therapeutics, Inc. (NASDAQ:RNAC) insiders

Key Insights

• Significant insider control over Cartesian Therapeutics implies vested interests in company growth
• The top 2 shareholders own 56% of the company
• Institutions own 26% of Cartesian Therapeutics

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To get a sense of who is truly in control of Cartesian Therapeutics, Inc. (NASDAQ:RNAC), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to US$205m last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Cartesian Therapeutics.

See our latest analysis for Cartesian Therapeutics

What Does The Institutional Ownership Tell Us About Cartesian 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.

Cartesian Therapeutics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Cartesian Therapeutics' earnings history below. Of course, the future is what really matters.

Cartesian Therapeutics is not owned by hedge funds. Timothy Springer is currently the company's largest shareholder with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 8.3% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Cartesian Therapeutics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Cartesian Therapeutics, Inc.. This gives them effective control of the company. Given it has a market cap of US$205m, that means they have US$119m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 10% stake in Cartesian Therapeutics. 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

It seems that Private Companies own 5.5%, of the Cartesian Therapeutics stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Cartesian Therapeutics has 4 warning signs (and 2 which are a bit concerning) we think you should know about.

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.