Skillsoft Corp.'s (NYSE:SKIL) market cap touched US$119m last week, benefiting both public companies who own 37% as well as institutions
Key Insights
The considerable ownership by public companies in Skillsoft indicates that they collectively have a greater say in management and business strategy
54% of the business is held by the top 4 shareholders
To get a sense of who is truly in control of Skillsoft Corp. (NYSE:SKIL), it is important to understand the ownership structure of the business. With 37% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While public companies were the group that reaped the most benefits after last week’s 20% price gain, institutions also received a 34% cut.
Let's delve deeper into each type of owner of Skillsoft, beginning with the chart below.
View our latest analysis for Skillsoft
What Does The Institutional Ownership Tell Us About Skillsoft?
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 Skillsoft. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Skillsoft's historic earnings and revenue below, but keep in mind there's always more to the story.
Skillsoft is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Naspers Limited with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 4.1%, of the shares outstanding, respectively. Michael Klein, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
On looking further, we found that 54% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Skillsoft
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can see that insiders own shares in Skillsoft Corp.. In their own names, insiders own US$7.6m worth of stock in the US$119m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 19% stake in Skillsoft. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
It appears to us that public companies own 37% of Skillsoft. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Skillsoft has 3 warning signs (and 1 which is potentially serious) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com