雅虎香港財經 With 40% stake, Trajectory Alpha Acquisition Corp. (NYSE:TCOA) seems to have captured hedge funds investors' interest
Key Insights
Institutions' substantial holdings in Trajectory Alpha Acquisition implies that they have significant influence over the company's share price
51% of the business is held by the top 7 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
To get a sense of who is truly in control of Trajectory Alpha Acquisition Corp. (NYSE:TCOA), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are hedge funds with 40% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Since hedge funds have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of Trajectory Alpha Acquisition.
Check out our latest analysis for Trajectory Alpha Acquisition
What Does The Institutional Ownership Tell Us About Trajectory Alpha Acquisition?
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.
As you can see, institutional investors have a fair amount of stake in Trajectory Alpha Acquisition. 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. 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 Trajectory Alpha Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 40% of Trajectory Alpha Acquisition shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Trajectory Alpha Sponsor Llc is currently the largest shareholder, with 11% of shares outstanding. With 7.3% and 6.9% of the shares outstanding respectively, 683 Capital Management, LLC and Polar Asset Management Partners Inc. are the second and third largest shareholders.
We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Trajectory Alpha Acquisition
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Trajectory Alpha 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$772k worth of shares in the US$222m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 11%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Trajectory Alpha Acquisition better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Trajectory Alpha Acquisition (of which 2 are concerning!) you should know about.
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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