January 12, 2025
Every investor in Robinhood Markets, Inc. ( NASDAQ:HOOD ) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 67% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 3.1% last week. However, the 264% one-year returns may have helped alleviate their overall losses. They should, however, be mindful of further losses in the future.
Let's take a closer look to see what the different types of shareholders can tell us about Robinhood Markets.
View our latest analysis for Robinhood Markets
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.
Robinhood Markets already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst 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 fast. It's therefore worth looking at Robinhood Markets' 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. Hedge funds don't have many shares in Robinhood Markets. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 7.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.4% and 6.3%, of the shares outstanding, respectively. Interestingly, the bottom two of the top three shareholders also hold the title of Top Key Executive and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.
A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
It seems insiders own a significant proportion of Robinhood Markets, Inc.. It is very interesting to see that insiders have a meaningful US$5.0b stake in this US$35b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
The general public, who are usually individual investors, hold a 19% stake in Robinhood Markets. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
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 Robinhood Markets is showing2 warning signs in our investment analysis , 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.
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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.
