The big shareholder groups in Social Capital Hedosophia Holdings Corp. IV (NYSE:IPOD) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that used to be publicly owned tend to have lower insider ownership.
Social Capital Hedosophia Holdings IV is a smaller company with a market capitalization of US$572m, 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 institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Social Capital Hedosophia Holdings IV.
What Does The Institutional Ownership Tell Us About Social Capital Hedosophia Holdings IV?
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.
As you can see, institutional investors have a fair amount of stake in Social Capital Hedosophia Holdings IV. 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 Social Capital Hedosophia Holdings IV, (below). Of course, keep in mind that there are other factors to consider, too.
NYSE:IPOD Earnings and Revenue Growth February 15th 2022
Hedge funds don't have many shares in Social Capital Hedosophia Holdings IV. Looking at our data, we can see that the largest shareholder is SCH Sponsor IV LLC with 20% of shares outstanding. Millennium Management LLC is the second largest shareholder owning 4.4% of common stock, and Empyrean Capital Partners, LP holds about 4.2% of the company stock.
A closer look at our ownership figures suggests that the top 20 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Social Capital Hedosophia Holdings IV
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.
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 information suggests that Social Capital Hedosophia Holdings Corp. IV insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about US$994k worth of stock. This compares to a market capitalization of US$572m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 36% stake in Social Capital Hedosophia Holdings IV. 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
It seems that Private Companies own 20%, of the Social Capital Hedosophia Holdings IV stock. 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.
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 - Social Capital Hedosophia Holdings IV has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
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.
