Veritone, Inc.'s (NASDAQ:VERI) latest 16% decline adds to one-year losses, institutional investors may consider drastic measures

By
Simply Wall St
Published
May 25, 2022
NasdaqGM:VERI
Source: Shutterstock

A look at the shareholders of Veritone, Inc. (NASDAQ:VERI) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by US$48m. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 60% for shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the downtrend continues, institutions may face pressures to sell Veritone, which might have negative implications on individual investors.

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

See our latest analysis for Veritone

ownership-breakdown
NasdaqGM:VERI Ownership Breakdown May 25th 2022

What Does The Institutional Ownership Tell Us About Veritone?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Veritone. 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. 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 Veritone, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGM:VERI Earnings and Revenue Growth May 25th 2022

Veritone is not owned by hedge funds. Banta Asset Management, Lp is currently the largest shareholder, with 6.6% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.3% and 5.3%, of the shares outstanding, respectively. Ryan Steelberg, who is the second-largest shareholder, also happens to hold the title of President. Furthermore, CEO Chad Steelberg is the owner of 5.2% of the company's shares.

A closer look at our ownership figures suggests that the top 19 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 Veritone

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Veritone, Inc.. Insiders own US$37m worth of shares in the US$261m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Veritone. 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 Veritone better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Veritone you should know about.

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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