Institutional ownership plays a significant role in the stock market, and Taboola.com Ltd. (NASDAQ:TBLA) is not an exception. By analyzing the shareholders of Taboola.com, we can identify which group holds the most power in the company. Currently, institutions own 27% of the company, indicating that their trading actions can greatly influence the stock price. This makes them the group that stands to benefit the most if the stock rises or suffer the most if there is a downturn.
Recent market gains have been favorable for institutional investors, as Taboola.com gained US$86 million in market cap last week. This increase has further boosted the one-year return to shareholders, which currently stands at 56%.
While institutional ownership is essential, it’s important to consider the risks associated with a crowded trade. When multiple institutions own a stock, there is a higher risk that they might compete to sell the stock quickly if the trade goes wrong. This risk is especially significant for companies without a history of growth.
Hedge funds do not have a meaningful investment in Taboola.com, but the top shareholders include Yahoo Inc. with 25% of shares outstanding, Evergreen Venture Partners with 7.0% of common stock, and Danny Tocatly with approximately 5.8% of the company stock. Additionally, CEO Adam Singolda owns 3.3% of the shares.
Furthermore, it is worth noting that six of the top shareholders account for around 50% of the register. This indicates a balance between larger and smaller shareholders, with their interests potentially balancing each other out.
Considering insider ownership, it can be seen as positive when insiders hold a reasonable proportion of the company’s shares, as it suggests that they are invested in the company’s success. In the case of Taboola.com, insiders own a significant amount, with US$161 million worth of shares. This aligns their interests with the shareholders and indicates a positive outlook.
The general public, consisting mainly of individual investors, holds 23% of Taboola.com shares. Although this group cannot make major decisions, they do have some influence on how the company is run.
Private equity firms own 12% of the company, giving them the power to shape corporate strategy focused on value creation. This aspect can be encouraging to investors, as private equity firms often encourage strategies that highlight the company’s value. However, these holders may also exit the investment after taking it public.
Private companies own 25% of Taboola.com stock, which is worth further investigation. If related parties have an interest in these private companies, it should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
To gain a comprehensive understanding of Taboola.com, it is crucial to consider various factors beyond ownership. However, analyzing institutional ownership and insider ownership can provide insights into the company’s expected performance and the alignment of interests among shareholders.
Definition of Terms:
– Institutional Ownership: The percentage of a company’s stock that is held by institutional investors, such as pension funds, mutual funds, and insurance companies.
– Insider Ownership: The percentage of a company’s stock that is owned by insiders, including board members, executives, and management.
– General Public Ownership: The percentage of a company’s stock that is owned by individual investors who are not affiliated with institutions or insiders.
– Private Equity Ownership: The percentage of a company’s stock that is held by private equity firms, which specialize in investing in privately held companies or taking public companies private.
– Private Company Ownership: The percentage of a company’s stock that is owned by private companies.
Sources: Simply Wall St