Institutions own 46% of Strategy Inc (NASDAQ:MSTR) shares but retail investors control 48% of the company

• The considerable ownership by retail investors in Strategy indicates that they collectively have a greater say in management and business strategy

• 42% of the business is held by the top 25 shareholders

• Institutional ownership in Strategy is 46%

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If you want to know who really controls Strategy Inc (NASDAQ:MSTR), then you’ll have to look at the makeup of its share registry. With 48% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutions, on the other hand, account for 46% of the company’s stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

In the chart below, we zoom in on the different ownership groups of Strategy.

View our latest analysis for Strategy

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.

Strategy 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. 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 Strategy’s historic earnings and revenue below, but keep in mind there’s always more to the story.

Strategy is not owned by hedge funds. Capital Research and Management Company is currently the largest shareholder, with 6.8% of shares outstanding. The second and third largest shareholders are Michael Saylor and The Vanguard Group, Inc., with an equal amount of shares to their name at 6.6%. Michael Saylor, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

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 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.

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own some shares in Strategy Inc. The insiders have a meaningful stake worth US$3.2b. we sometimes take an interest in whether they have been buying or selling.

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Strategy. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with Strategy (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.