reAlpha Tech Corp.'s (NASDAQ:AIRE) 257% gain last week benefited both retail investors who own 50% as well as insiders

Key Insights

• reAlpha Tech's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 50% ownership
• Insiders own 48% of reAlpha Tech

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To get a sense of who is truly in control of reAlpha Tech Corp. (NASDAQ:AIRE), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 257% increase in the stock price last week, retail investors profited the most, but insiders who own 48% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of reAlpha Tech.

Check out our latest analysis for reAlpha Tech

What Does The Institutional Ownership Tell Us About reAlpha Tech?

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.

Less than 5% of reAlpha Tech is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in reAlpha Tech. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In reAlpha Tech's case, its Top Key Executive, Giri Devanur, is the largest shareholder, holding 36% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.5% and 2.8%, of the shares outstanding, respectively. In addition, we found that Michael Logozzo, the CEO has 2.6% of the shares allocated to their name.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of reAlpha Tech

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 a reasonable proportion of reAlpha Tech Corp.. Insiders have a US$49m stake in this US$103m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 50% stake in reAlpha Tech, suggesting it is a fairly popular stock. 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.

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 5 warning signs for reAlpha Tech you should be aware of, and 3 of them are a bit unpleasant.

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.