Here's What Quantum Corporation's (NASDAQ:QMCO) Shareholder Ownership Structure Looks Like

By
Simply Wall St
Published
January 20, 2022
NasdaqGM:QMCO
Source: Shutterstock

If you want to know who really controls Quantum Corporation (NASDAQ:QMCO), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.

Quantum is a smaller company with a market capitalization of US$297m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Quantum.

View our latest analysis for Quantum

ownership-breakdown
NasdaqGM:QMCO Ownership Breakdown January 20th 2022

What Does The Institutional Ownership Tell Us About Quantum?

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 Quantum. 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. 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 Quantum's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGM:QMCO Earnings and Revenue Growth January 20th 2022

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It would appear that 5.1% of Quantum shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. B. Riley Capital Management, LLC is currently the largest shareholder, with 13% of shares outstanding. With 12% and 6.5% of the shares outstanding respectively, Neuberger Berman BD LLC and BlackRock, Inc. are the second and third largest shareholders. Additionally, the company's CEO James Lerner directly holds 1.9% of the total shares outstanding.

We also observed that the top 8 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 Quantum

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 see that insiders own shares in Quantum Corporation. As individuals, the insiders collectively own US$13m worth of the US$297m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Quantum. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Quantum better, we need to consider many other factors. For example, we've discovered 5 warning signs for Quantum (1 is a bit unpleasant!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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