Volta Inc.'s (NYSE:VLTA) market cap dropped US$135m last week; Individual investors bore the brunt

By
Simply Wall St
Published
November 25, 2021
NYSE:VLTA
Source: Shutterstock

Every investor in Volta Inc. (NYSE:VLTA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 7.5% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 17% stock also took a hit.

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

Check out our latest analysis for Volta

ownership-breakdown
NYSE:VLTA Ownership Breakdown November 26th 2021

What Does The Institutional Ownership Tell Us About Volta?

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 Volta. 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 Volta, (below). Of course, keep in mind that there are other factors to consider, too.

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NYSE:VLTA Earnings and Revenue Growth November 26th 2021

We note that hedge funds don't have a meaningful investment in Volta. Looking at our data, we can see that the largest shareholder is John Tough with 7.8% of shares outstanding. With 7.3% and 7.2% of the shares outstanding respectively, Energize Ventures LLC and Scott Mercer are the second and third largest shareholders. Scott Mercer, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Volta

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.

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 information suggests that insiders maintain a significant holding in Volta Inc.. Insiders own US$285m worth of shares in the US$1.7b company. That's quite meaningful. 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 -- including retail investors -- own 55% of Volta. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With a stake of 7.3%, private equity firms could influence the Volta 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.

Private Company Ownership

It seems that Private Companies own 4.4%, of the Volta stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Volta .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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