Do insiders own many shares of BlueCity Holdings Limited (NASDAQ: BLCT)?

The large shareholder groups of BlueCity Holdings Limited (NASDAQ: BLCT) have power over the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

With a market cap of US $ 111 million, BlueCity Holdings is a small cap stock, so it might be overlooked by many institutional investors. Our analysis of company ownership, below, shows that institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about BlueCity Holdings.

See our latest analysis for BlueCity Holdings

NasdaqGM: Distribution of BLCT ownership September 17, 2021

What does institutional ownership tell us about BlueCity Holdings?

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 businesses to have some institutions listed, especially if they are growing.

BlueCity Holdings already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out BlueCity Holdings’ past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

profit and revenue growth
NasdaqGM: BLCT Profits and Revenue Growth September 17, 2021

We note that the hedge funds do not have a significant investment in BlueCity Holdings. With a 31% stake, CEO Baoli Ma is the largest shareholder. In comparison, the second and third shareholders hold around 10% and 7.7% of the capital.

Looking further, we found that 55% of the shares are owned by the 4 largest shareholders. In other words, these shareholders have a say in the decisions of the company.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. While there is some coverage from analysts, the company is likely not widely covered. So he might get more attention, down the track.

Insider ownership of BlueCity Holdings

The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of BlueCity Holdings Limited. Insiders own $ 35 million in shares of the $ 111 million company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

The general public has a 23% stake in BlueCity Holdings. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.

Private shareholders

With an 18% stake, private equity firms are able to play a role in shaping corporate strategy with an emphasis on value creation. Some might like this, as sometimes private capital is activists holding management accountable. But other times, the private equity sells, after you take the company public.

Owned by a private company

Our data indicates that private companies own 6.2% of the company’s shares. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. Consider risks, for example. Every business has them, and we’ve spotted 2 warning signs for BlueCity Holdings you should know.

If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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