Private equity firms in Rapid Micro Biosystems, Inc. (NASDAQ:RPID) are its biggest bettors, and their bets paid off as stock gained 11% last week

Key Insights

• The considerable ownership by private equity firms in Rapid Micro Biosystems indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Rapid Micro Biosystems is 18%

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A look at the shareholders of Rapid Micro Biosystems, Inc. (NASDAQ:RPID) can tell us which group is most powerful. We can see that private equity firms own the lion's share in the company with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private equity firms benefitted the most after the company's market cap rose by US$15m last week.

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

View our latest analysis for Rapid Micro Biosystems

What Does The Institutional Ownership Tell Us About Rapid Micro Biosystems?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Rapid Micro Biosystems already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Rapid Micro Biosystems, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Rapid Micro Biosystems. Our data shows that Bain Capital Life Sciences Investors, LLC is the largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 8.2% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Rapid Micro Biosystems

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own some shares in Rapid Micro Biosystems, Inc.. It has a market capitalization of just US$148m, and insiders have US$2.4m worth of shares, in their own names. 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 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rapid Micro Biosystems. 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

With a stake of 44%, private equity firms could influence the Rapid Micro Biosystems 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Rapid Micro Biosystems that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.