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The largest shareholder of the company is Giri Devanur with a 60% stake
Using data from company’s past performance alongside ownership research, one can better assess the future performance of a company
Every investor in reAlpha Tech Corp. (NASDAQ:AIRE) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 82% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, insiders scored the highest last week as the company hit US$164m market cap following a 108% gain in the stock.
Let’s delve deeper into each type of owner of reAlpha Tech, beginning with the chart below.
NasdaqCM:AIRE Ownership Breakdown December 28th 2024
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of reAlpha Tech, for yourself, below.
NasdaqCM:AIRE Earnings and Revenue Growth December 28th 2024
Hedge funds don’t have many shares in reAlpha Tech. Looking at our data, we can see that the largest shareholder is the CEO Giri Devanur with 60% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Monaz Karkaria is the second largest shareholder owning 6.4% of common stock, and Brent Crawford holds about 5.2% of the company stock.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
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.
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.
Our information suggests that insiders own more than half of reAlpha Tech Corp.. This gives them effective control of the company. Given it has a market cap of US$164m, that means they have US$135m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
The general public, who are usually individual investors, hold a 17% stake in reAlpha Tech. 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.
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.
