SoFi Technologies, Inc.'s (NASDAQ:SOFI) top owners are individual investors with 48% stake, while37% is held by institutions – Yahoo Finance
A look at the shareholders of SoFi Technologies, Inc. (NASDAQ:SOFI) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And institutions on the other hand have a 37% ownership in the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies.
Let’s delve deeper into each type of owner of SoFi Technologies, beginning with the chart below.
View our latest analysis for SoFi Technologies
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 SoFi Technologies. 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. 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 SoFi Technologies, (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 SoFi Technologies. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 7.2% of shares outstanding. With 4.9% and 4.6% of the shares outstanding respectively, SoftBank Group Corp. and Clay Wilkes are the second and third largest shareholders. Additionally, the company’s CEO Anthony Noto directly holds 0.6% of the total shares outstanding.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders maintain a significant holding in SoFi Technologies, Inc.. It is very interesting to see that insiders have a meaningful US$446m stake in this US$4.3b business. 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 48% stake in SoFi Technologies. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
It appears to us that public companies own 4.9% of SoFi Technologies. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that SoFi Technologies is showing 2 warning signs in our investment analysis , you should know about…
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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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