Pagaya Technologies Ltd.'s (NASDAQ:PGY) market cap dropped US$52m last week; individual investors who hold 31% were hit as were institutions

Key Insights

• Significant control over Pagaya Technologies by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 10 shareholders
• Insiders have sold recently

Every investor in Pagaya Technologies Ltd. (NASDAQ:PGY) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 31% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 7.2% price drop, institutions with their 28% holdings also suffered.

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

Check out our latest analysis for Pagaya Technologies

What Does The Institutional Ownership Tell Us About Pagaya Technologies?

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.

Pagaya Technologies already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Pagaya Technologies' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Pagaya Technologies. Looking at our data, we can see that the largest shareholder is Viola Group with 11% of shares outstanding. With 7.5% and 6.9% of the shares outstanding respectively, Oak HC/FT Management Company, LLC and Gal Krubiner are the second and third largest shareholders. Gal Krubiner, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

We also observed that the top 10 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 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 Pagaya Technologies

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.

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.

Our information suggests that insiders maintain a significant holding in Pagaya Technologies Ltd.. Insiders own US$135m worth of shares in the US$717m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Pagaya Technologies. 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.

Private Equity Ownership

With an ownership of 19%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 3.7%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. Be aware that Pagaya Technologies is showing 3 warning signs in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.