Yahoo Finance With 50% ownership, RLX Technology Inc. (NYSE:RLX) insiders have a lot at stake
Key Insights
Significant insider control over RLX Technology implies vested interests in company growth
The top 5 shareholders own 56% of the company
A look at the shareholders of RLX Technology Inc. (NYSE:RLX) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
So it follows, every decision made by insiders of RLX Technology regarding the company's future would be crucial to them.
In the chart below, we zoom in on the different ownership groups of RLX Technology.
See our latest analysis for RLX Technology
What Does The Institutional Ownership Tell Us About RLX Technology?
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.
As you can see, institutional investors have a fair amount of stake in RLX Technology. 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. 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 RLX Technology, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in RLX Technology. With a 24% stake, CEO Wang Ying is the largest shareholder. In comparison, the second and third largest shareholders hold about 11% and 7.3% of the stock. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.
After doing some more digging, we found that the top 5 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of RLX Technology
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.
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.
It seems insiders own a significant proportion of RLX Technology Inc.. It is very interesting to see that insiders have a meaningful US$1.2b stake in this US$2.4b business. 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, who are usually individual investors, hold a 20% stake in RLX Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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.
