Institutional owners may consider drastic measures as WM Technology, Inc.'s (NASDAQ:MAPS) recent US$29m drop adds to long-term losses

Key Insights

• Given the large stake in the stock by institutions, WM Technology's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 15 shareholders
• Recent sales by insiders

If you want to know who really controls WM Technology, Inc. (NASDAQ:MAPS), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$203m last week after a 20% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 26% might not go down well especially with this category of shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell WM Technology, which might have negative implications on individual investors.

In the chart below, we zoom in on the different ownership groups of WM Technology.

Check out our latest analysis for WM Technology

What Does The Institutional Ownership Tell Us About WM Technology?

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 WM Technology does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 WM Technology, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 6.3% of WM Technology shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 6.3% of shares outstanding. Senvest Management, LLC is the second largest shareholder owning 6.3% of common stock, and Morgan Stanley, Investment Banking and Brokerage Investments holds about 6.0% of the company stock. Furthermore, CEO Douglas Francis is the owner of 5.1% of the company's shares.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 WM Technology

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 WM Technology, Inc.. As individuals, the insiders collectively own US$18m worth of the US$203m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. 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:

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

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.