Institutions along with private equity firms who hold considerable shares inInstil Bio, Inc. (NASDAQ:TIL) come under pressure; lose 12% of holdings value

Key Insights

• Significant control over Instil Bio by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 4 shareholders own 50% of the company
• Institutions own 27% of Instil Bio

A look at the shareholders of Instil Bio, Inc. (NASDAQ:TIL) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private equity firms with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 12% decrease in the stock price last week, private equity firms suffered the most losses, but institutions who own 27% stock also took a hit.

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

Check out our latest analysis for Instil Bio

What Does The Institutional Ownership Tell Us About Instil Bio?

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.

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

It would appear that 18% of Instil Bio shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Curative Ventures is the largest shareholder with 29% of shares outstanding. For context, the second largest shareholder holds about 9.0% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Additionally, the company's CEO Bronson Crouch directly holds 1.9% of the total shares outstanding.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. 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 Instil 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.

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.

We can report that insiders do own shares in Instil Bio, Inc.. As individuals, the insiders collectively own US$3.6m worth of the US$144m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Instil Bio. 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 an ownership of 38%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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. Case in point: We've spotted 3 warning signs for Instil Bio you should be aware of, and 1 of them makes us a bit uncomfortable.

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.