Institutional owners may take dramatic actions as Shopify Inc.'s (NYSE:SHOP) recent 9.4% drop adds to one-year losses - Nasdaq

Category: Shopify Sellers News
Original source: Nasdaq
Read time: < 4 minutes
Sentiment bias: Negative
Sentiment Score: -0.88362
Published: Sep 26th, 2022
Institutional owners may take dramatic actions as Shopify Inc.'s (NYSE:SHOP) recent 9.4% drop adds to one-year losses - Nasdaq

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And institutional investors endured the highest losses after the company's share price fell by 9.
Institutional investors commonly compare their own returns to the returns of a commonly followed index.
We can see that Shopify does have institutional investors; and they hold a good portion of the company's stock.
Let's take a closer look to see what the different types of shareholders can tell us about Shopify.
NYSE:SHOP Ownership Breakdown September 26th 2022 What Does The Institutional Ownership Tell Us About Shopify?
NYSE:SHOP Earnings and Revenue Growth September 26th 2022 Investors should note that institutions actually own more than half the company, so they can collectively wield significant power.
This article by Simply Wall St is general in nature.

Institutional owners may take dramatic actions as Shopify Inc.'s (NYSE:SHOP) recent 9.4% drop adds to one-year losses - Nasdaq

To get a sense of who is truly in control of Shopify Inc. (NYSE:SHOP), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company. And institutional investors endured the highest losses after the company's share price fell by 9.4% last week. The recent loss, which adds to a one-year loss of 80% for stockholders, may not sit well with this group of investors. 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 Shopify, which might have negative implications on individual investors. Let's take a closer look to see what the different types of shareholders can tell us about Shopify. NYSE:SHOP Ownership Breakdown September 26th 2022 What Does The Institutional Ownership Tell Us About Shopify? 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. We can see that Shopify does have institutional investors; and they hold a good portion of the company's stock. 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 Shopify's earnings history below. Of course, the future is what really matters. NYSE:SHOP Earnings and Revenue Growth September 26th 2022 Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Shopify. With a 6.2% stake, CEO Tobias Lütke is the largest shareholder. The second and third largest shareholders are Capital Research and Management Company and Morgan Stanley Investment Management Inc., with an equal amount of shares to their name at 5.4%. Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder. 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. 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 Shopify 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. 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 most recent data indicates that insiders own some shares in Shopify Inc.. Insiders own US$2.3b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling. General Public Ownership The general public-- including retail investors -- own 35% 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. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Shopify , and understanding them should be part of your investment process. 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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The Original Article can be found on Nasdaq

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