Private equity firms who hold 45% of Kinnate Biopharma Inc. (NASDAQ:KNTE) gained 11%, institutions profited as well
Key Insights
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The considerable ownership by private equity firms in Kinnate Biopharma indicates that they collectively have a greater say in management and business strategy
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A total of 3 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of Kinnate Biopharma Inc. (NASDAQ:KNTE), it is important to understand the ownership structure of the business. We can see that private equity firms own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 11% increase in the stock price last week, private equity firms profited the most, but institutions who own 31% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Kinnate Biopharma.
Check out our latest analysis for Kinnate Biopharma
What Does The Institutional Ownership Tell Us About Kinnate Biopharma?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Kinnate Biopharma already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Kinnate Biopharma's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 5.5% of Kinnate Biopharma shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is Foresite Capital Management, LLC with 28% of shares outstanding. With 17% and 5.5% of the shares outstanding respectively, OrbiMed Advisors LLC and Tang Capital Management, LLC are the second and third largest shareholders.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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.