Retail investors who have a significant stake must be disappointed along with institutions after TuSimple Holdings Inc.'s (NASDAQ:TSP) market cap dropped by US$62m

Key Insights

• TuSimple Holdings' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 8 shareholders own 50% of the company
• Insider ownership in TuSimple Holdings is 20%

To get a sense of who is truly in control of TuSimple Holdings Inc. (NASDAQ:TSP), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 25% came under pressure after market cap dropped to US$241m last week,retail investors took the most losses.

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

Check out our latest analysis for TuSimple Holdings

What Does The Institutional Ownership Tell Us About TuSimple Holdings?

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 TuSimple Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 TuSimple Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in TuSimple Holdings. Xiaodi Hou is currently the largest shareholder, with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 8.0% of the stock. Mo Chen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Cheng Lu directly holds 1.1% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of TuSimple Holdings

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own a reasonable proportion of TuSimple Holdings Inc.. Insiders own US$49m worth of shares in the US$241m 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-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 6.9% of TuSimple Holdings stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Take risks for example - TuSimple Holdings has 5 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.