Institutional investors may overlook Kaltura, Inc.'s (NASDAQ:KLTR) recent US$42m market cap drop as long-term gains remain positive

Explore Kaltura's Fair Values from the Community and select yours

Key Insights

• Institutions' substantial holdings in Kaltura implies that they have significant influence over the company's share price
• A total of 7 investors have a majority stake in the company with 53% ownership
• Insiders have sold recently

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A look at the shareholders of Kaltura, Inc. (NASDAQ:KLTR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 16% in value last week. However, the 20% one-year return to shareholders may have helped lessen their pain. But they would probably be wary of future losses.

Let's take a closer look to see what the different types of shareholders can tell us about Kaltura.

Check out our latest analysis for Kaltura

What Does The Institutional Ownership Tell Us About Kaltura?

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 Kaltura 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. 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 Kaltura, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Kaltura. Looking at our data, we can see that the largest shareholder is 406 Ventures Management, L.P with 11% of shares outstanding. With 10% and 9.4% of the shares outstanding respectively, Nexus Venture Partners and Goldman Sachs Group, Investment Banking and Securities Investments are the second and third largest shareholders. Additionally, the company's CEO Ron Yekutiel directly holds 6.7% of the total shares outstanding.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kaltura

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. 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.

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.

We can report that insiders do own shares in Kaltura, Inc.. In their own names, insiders own US$23m worth of stock in the US$227m 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, who are usually individual investors, hold a 21% stake in Kaltura. 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 an ownership of 32%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kaltura better, we need to consider many other factors. For instance, we've identified 2 warning signs for Kaltura that you should be aware of.

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.