Individual investors who hold 54% of Argo Blockchain plc (LON:ARB) gained 24%, institutions profited as well

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

Fri, Dec 22, 2023, 1:56 AM 4 min read

To get a sense of who is truly in control of Argo Blockchain plc (LON:ARB), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors gained the most after market cap touched UK£89m last week, while institutions who own 38% also benefitted.

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

See our latest analysis for Argo Blockchain

ownership-breakdown — LSE:ARB Ownership Breakdown December 22nd 2023

What Does The Institutional Ownership Tell Us About Argo Blockchain?

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 Argo Blockchain does have institutional investors; and they hold a good portion of the company's stock. 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 Argo Blockchain's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — LSE:ARB Earnings and Revenue Growth December 22nd 2023

Hedge funds don't have many shares in Argo Blockchain. The company's largest shareholder is First Investments Holding Ltd, with ownership of 7.5%. In comparison, the second and third largest shareholders hold about 4.8% and 4.4% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Argo Blockchain

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 data suggests that insiders own under 1% of Argo Blockchain plc in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It seems the board members have no more than UK£33k worth of shares in the UK£89m 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.

General Public Ownership

The general public -- including retail investors -- own 54% of Argo Blockchain. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 7.6%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Argo Blockchain better, we need to consider many other factors. For instance, we've identified 5 warning signs for Argo Blockchain (3 are concerning) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.