Bilibili Inc.'s (NASDAQ:BILI) high institutional ownership speaks for itself as stock continues to impress, up 11% over last week
Given the large stake in the stock by institutions, Bilibili's stock price might be vulnerable to their trading decisions
50% of the business is held by the top 13 shareholders
Recent sales by insiders
To get a sense of who is truly in control of Bilibili Inc. (NASDAQ:BILI), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And things are looking up for institutional investors after the company gained US$744m in market cap last week. One-year return to shareholders is currently 81% and last week's gain was the icing on the cake.
Let's take a closer look to see what the different types of shareholders can tell us about Bilibili.
Check out our latest analysis for Bilibili
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.
We can see that Bilibili 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. 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 Bilibili's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Bilibili. With a 12% stake, CEO Rui Chen is the largest shareholder. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 6.6% by the third-largest shareholder. Interestingly, the third-largest shareholder, Yi Xu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
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 information suggests that insiders maintain a significant holding in Bilibili Inc.. Insiders own US$1.6b worth of shares in the US$7.7b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
The general public, who are usually individual investors, hold a 22% stake in Bilibili. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
It appears to us that public companies own 11% of Bilibili. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Bilibili 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.
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.
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