If you want to know who really controls Twitter, Inc. (NYSE:TWTR), then you’ll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.
Twitter is a pretty big company. It has a market capitalization of US$52b. Normally institutions would own a significant portion of a company of this size. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups to learn more about Twitter.
What Does The Institutional Ownership Tell Us About Twitter?
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 Twitter does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility among professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop almost. It’s therefore worth looking at Twitter’s earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Twitter is not owned by hedge funds. Morgan Stanley Investment Management Inc. is currently the company’s largest shareholder with 8.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.7% and 6.6% of the stock. Additionally, the company’s CEO Jack Dorsey directly holds 2.3% of the total shares outstanding.
After doing some more digging, we found that the top 18 have the combined ownership of 51% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Twitter
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.
Shareholders would probably be interested to learn that insiders own shares in Twitter, Inc.. The insiders have a meaningful stake worth US$1.3b. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public holds an 18% stake in Twitter. 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.
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 3 warning signs for Twitter you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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.
Have feedback on this article? Concerned about the content? get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
The views and opinions expressed in are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.