To get a sense of who actually controls C3.ai, Inc. (NYSE: AI), it’s important to understand the company’s ownership structure. And the group that holds the biggest slice of the pie are individual investors with 43% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).
Individual investors gained the most after market capitalization hit $1.6 billion last week, while institutions holding 37% also benefited.
Let’s take a closer look at what different types of shareholders can tell us about C3.ai.
Before looking at the breakdown of owners, note that our analysis indicates that AI is potentially overrated!
What does institutional ownership tell us about C3.ai?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that C3.ai has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see C3.ai’s revenue and historical earnings below, but keep in mind there’s always more to tell.
C3.ai is not owned by hedge funds. The company’s CEO, Thomas Siebel, is the largest shareholder with 8.6% of the shares outstanding. Baker Hughes Holdings LLC is the second largest shareholder with 8.0% of the common stock and The Vanguard Group, Inc. owns approximately 6.5% of the company’s stock.
A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the register, suggesting a large group of small shareholders where no single shareholder has a majority.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.
Insider property of C3.ai
The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
It appears that insiders hold a significant stake in C3.ai, Inc. It is very interesting to see that insiders hold a significant stake of $196 million in this $1.6 billion company. Good to see this level of investment. You can check here if these insiders have bought recently.
General public property
With a 43% stake, the general public, consisting mainly of individual investors, has some influence on C3.ai. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Private Company Ownership
Private companies appear to hold 8.0% of C3.ai shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
While it is worth considering the different groups that own a business, there are other, even more important factors. Consider the risks, for example. Every business has them, and we’ve spotted 2 warning signs for C3.ai you should know.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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