Bit Digital, Inc.'s (NASDAQ:BTBT) market cap dropped US$75m last week; individual investors who hold 58% were hit as were institutions

Key Insights

• The considerable ownership by individual investors in Bit Digital indicates that they collectively have a greater say in management and business strategy
• 36% of the business is held by the top 25 shareholders
• 40% of Bit Digital is held by Institutions

Every investor in Bit Digital, Inc. (NASDAQ:BTBT) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 13% price drop, institutions with their 40% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Bit Digital.

Check out our latest analysis for Bit Digital

What Does The Institutional Ownership Tell Us About Bit Digital?

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.

We can see that Bit Digital does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Bit Digital's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Bit Digital. Our data shows that BlackRock, Inc. is the largest shareholder with 6.6% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.9% and 3.8% of the stock. Furthermore, CEO Samir Tabar is the owner of 0.9% of the company's shares.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Bit Digital

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Bit Digital, Inc.. In their own names, insiders own US$11m worth of stock in the US$498m 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 58% of Bit Digital shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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. For example, we've discovered 2 warning signs for Bit Digital (1 is potentially serious!) that you should be aware of before investing here.

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.