Individual investors who hold 54% of Rigetti Computing, Inc. (NASDAQ:RGTI) gained 24%, institutions profited as well

Key Insights

• The considerable ownership by individual investors in Rigetti Computing indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 44% of the company
• Recent sales by insiders

To get a sense of who is truly in control of Rigetti Computing, Inc. (NASDAQ:RGTI), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 24% increase in the stock price last week, individual investors profited the most, but institutions who own 33% stock also stood to gain from the increase.

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

Check out our latest analysis for Rigetti Computing

What Does The Institutional Ownership Tell Us About Rigetti Computing?

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.

As you can see, institutional investors have a fair amount of stake in Rigetti Computing. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Rigetti Computing's historic earnings and revenue below, but keep in mind there's always more to the story.

Rigetti Computing is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Deer Management Company, LLC with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.7% and 4.6% of the stock.

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.

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 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 Rigetti Computing

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 Rigetti Computing, Inc.. In their own names, insiders own US$7.0m worth of stock in the US$285m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of Rigetti Computing shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With an ownership of 11%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Rigetti Computing (at least 1 which is concerning) , and understanding them should be part of your investment process.

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.