1&1 AG's (ETR:1U1) top owners are public companies with 79% stake, while 12% is held by individual investors

editorial-team@simplywallst.com (Simply Wall St)

Fri, May 31, 2024, 6:41 AM 4 min read

Significant control over 1&1 by public companies implies that the general public has more power to influence management and governance-related decisions
The largest shareholder of the company is United Internet AG with a 79% stake
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in 1&1 AG (ETR:1U1) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 79% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors, on the other hand, account for 12% of the company's stockholders.

Let's delve deeper into each type of owner of 1&1, beginning with the chart below.

Check out our latest analysis for 1&1

ownership-breakdown — XTRA:1U1 Ownership Breakdown May 31st 2024

What Does The Institutional Ownership Tell Us About 1&1?

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 1&1. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 1&1's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — XTRA:1U1 Earnings and Revenue Growth May 31st 2024

Hedge funds don't have many shares in 1&1. Our data shows that United Internet AG is the largest shareholder with 79% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 3.0% of the shares outstanding, followed by an ownership of 1.2% by the third-largest shareholder.

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 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 1&1

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 1&1 AG in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own €3.8m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in 1&1. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

We can see that public companies hold 79% of the 1&1 shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for 1&1 you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.