Insiders are the top stockholders in Arqit Quantum Inc. (NASDAQ:ARQQ), and the recent 15% drop might have disappointed them

Key Insights

• Arqit Quantum's significant insider ownership suggests inherent interests in company's expansion
• The top 4 shareholders own 56% of the company
• 18% of Arqit Quantum is held by Institutions

Every investor in Arqit Quantum Inc. (NASDAQ:ARQQ) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 26% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by US$12m.

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

Check out our latest analysis for Arqit Quantum

What Does The Institutional Ownership Tell Us About Arqit Quantum?

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.

Arqit Quantum already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Arqit Quantum, (below). Of course, keep in mind that there are other factors to consider, too.

Arqit Quantum is not owned by hedge funds. D2bw Limited is currently the company's largest shareholder with 23% of shares outstanding. The second and third largest shareholders are Notion Capital Managers LLP and Liberum Capital Limited, Asset Management Arm, with an equal amount of shares to their name at 12%. Additionally, the company's CEO David Williams directly holds 9.6% of the total shares outstanding.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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

Insider Ownership Of Arqit Quantum

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Arqit Quantum Inc.. Insiders have a US$43m stake in this US$168m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Arqit Quantum. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 19%, private equity firms could influence the Arqit Quantum 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

We can see that Private Companies own 23%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Arqit Quantum better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Arqit Quantum you should be aware of, and 2 of them can't be ignored.

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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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.