Institutional investors control 49% of Hut 8 Corp. (NASDAQ:HUT) and were rewarded last week after stock increased 24%

Key Insights

• Institutions' substantial holdings in Hut 8 implies that they have significant influence over the company's share price
• A total of 14 investors have a majority stake in the company with 50% ownership
• Insiders own 11% of Hut 8

To get a sense of who is truly in control of Hut 8 Corp. (NASDAQ:HUT), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 49% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, institutional investors ended up benefitting the most after the company hit US$2.3b in market cap. The one-year return on investment is currently 122% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of Hut 8, beginning with the chart below.

Check out our latest analysis for Hut 8

What Does The Institutional Ownership Tell Us About Hut 8?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Hut 8 does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Hut 8's earnings history below. Of course, the future is what really matters.

It would appear that 9.8% of Hut 8 shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Coatue Management, L.L.C. is currently the company's largest shareholder with 9.8% of shares outstanding. With 7.2% and 6.8% of the shares outstanding respectively, BlackRock, Inc. and Michael Ho are the second and third largest shareholders. Michael Ho, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Asher Genoot directly holds 3.3% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hut 8

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Hut 8 Corp.. Insiders own US$252m worth of shares in the US$2.3b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Hut 8. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Hut 8 (of which 2 shouldn't be ignored!) you should know about.

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.