What types of shareholders own the majority of shares in Limelight Networks, Inc. (NASDAQ: LLNW)?
A look at the shareholders of Limelight Networks, Inc. (NASDAQ: LLNW) can tell us which group is more powerful. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.
Limelight Networks is a small company with a market cap of US $ 321 million, so it may still go under the radar of many institutional investors. In the graph below, we can see that institutional investors have bought into the company. Let’s take a closer look at what different types of shareholders can tell us about Limelight Networks.
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What does institutional ownership tell us about Limelight networks?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
We can see that Limelight Networks has institutional investors; and they own a large portion of the company’s shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it’s best to beware of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Limelight Networks earning history below. Of course, the future is what really matters.
Since institutional investors own more than half of the issued shares, the board will likely need to pay attention to their preferences. We note that the hedge funds do not have a significant investment in Limelight Networks. BlackRock, Inc. is currently the largest shareholder, with 7.7% of the shares outstanding. In comparison, the second and third shareholders hold around 4.9% and 4.1% of the capital.
Our studies suggest that the top 25 shareholders collectively control less than half of the shares of the company, which means that the shares of the company are widely disseminated and there is no dominant shareholder.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Insider Ownership of Limelight Networks
The definition of an insider may differ slightly from country to country, but board members still count. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would likely be interested to learn that insiders own shares of Limelight Networks, Inc. On their own behalf, insiders own $ 12 million in shares of the $ 321 million company. It’s good to see some investing from insiders, but it might be worth checking out if those insiders have bought.
General public property
With a 42% stake, the general public has some influence over Limelight Networks. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well. Concrete example: we have spotted 1 warning sign for Limelight networks you must be aware.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last day of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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