What Kind Of Investors Own Most Of Boku, Inc. (LON:BOKU)?

Simply Wall St

Mon, Aug 24, 2020, 11:17 PM 4 min read

A look at the shareholders of Boku, Inc. (LON:BOKU) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Boku is not a large company by global standards. It has a market capitalization of UK£266m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Boku.

Check out our latest analysis for Boku

ownership-breakdown — AIM:BOKU Ownership Breakdown August 25th 2020

What Does The Institutional Ownership Tell Us About Boku?

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.

Boku 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. 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 Boku's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — AIM:BOKU Earnings and Revenue Growth August 25th 2020

We note that hedge funds don't have a meaningful investment in Boku. Our data shows that Vitruvian Partners LLP is the largest shareholder with 7.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.9% and 4.6%, of the shares outstanding, respectively. Additionally, the company's CEO Jonathan Prideaux directly holds 0.9% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 Boku

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

I can report that insiders do own shares in Boku, Inc.. It has a market capitalization of just UK£266m, and insiders have UK£14m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 42% ownership, the general public have some degree of sway over Boku. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 7.5% stake in Boku. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Boku better, we need to consider many other factors. For instance, we've identified 2 warning signs for Boku that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

This article by Simply Wall St is general in nature. 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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