Could The MSD Acquisition Corp. (NASDAQ:MSDA) Ownership Structure Tell Us Something Useful? – Yahoo Finance

The big shareholder groups in MSD Acquisition Corp. (NASDAQ:MSDA) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

MSD Acquisition is a smaller company with a market capitalization of US$705m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about MSD Acquisition.

View our latest analysis for MSD Acquisition

ownership-breakdown

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.

MSD Acquisition already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 MSD Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth

Hedge funds don't have many shares in MSD Acquisition. MSD Sponsor Holdings, LLC is currently the largest shareholder, with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.2% and 3.5%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

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.

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 data suggests that insiders own under 1% of MSD Acquisition Corp. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than US$1.5m worth of shares in the US$705m company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over MSD Acquisition. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

It seems that Private Companies own 20%, of the MSD Acquisition stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 4 warning signs for MSD Acquisition (2 shouldn't be ignored!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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Could The MSD Acquisition Corp. (NASDAQ:MSDA) Ownership Structure Tell Us Something Useful? - Yahoo Finance