To get a sense of who is truly in control of Dada Nexus Limited (NASDAQ:DADA), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While the holdings of public companies took a hit after last week’s 8.5% price drop, institutions with their 21% holdings also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Dada Nexus.
What Does The Institutional Ownership Tell Us About Dada Nexus?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Dada Nexus does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Dada Nexus' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Dada Nexus. JD.com, Inc. is currently the largest shareholder, with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 9.1% and 6.5% of the stock. Jiaqi Kuai, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
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 Dada Nexus
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.
We can see that insiders own shares in Dada Nexus Limited. The insiders have a meaningful stake worth US$127m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 10% stake in Dada Nexus. 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 61% of Dada Nexus. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
It's always worth thinking about the different groups who own shares in a company. But to understand Dada Nexus better, we need to consider many other factors. Be aware that Dada Nexus is showing 2 warning signs in our investment analysis , you should know about...
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
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