Individual investors invested in Mercurity Fintech Holding Inc. (NASDAQ:MFH) copped the brunt of last week's US$75m market cap decline

Key Insights

• The considerable ownership by individual investors in Mercurity Fintech Holding indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 5 shareholders
• Insider ownership in Mercurity Fintech Holding is 27%

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A look at the shareholders of Mercurity Fintech Holding Inc. (NASDAQ:MFH) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 20% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 27% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Mercurity Fintech Holding.

See our latest analysis for Mercurity Fintech Holding

What Does The Institutional Ownership Tell Us About Mercurity Fintech Holding?

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.

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

Hedge funds don't have many shares in Mercurity Fintech Holding. The company's largest shareholder is Apollo Multi Asset Management LLP, with ownership of 23%. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 7.4% by the third-largest shareholder.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Mercurity Fintech Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Mercurity Fintech Holding Inc.. Insiders own US$97m worth of shares in the US$362m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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 Company Ownership

It seems that Private Companies own 9.6%, of the Mercurity Fintech Holding stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 3 warning signs for Mercurity Fintech Holding (2 are concerning!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.