Retail investors invested in Cool Link (Holdings) Limited (HKG:8491) copped the brunt of last week's HK$219m market cap decline

Key Insights

• Cool Link (Holdings)'s significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 43% of the business is held by the top 6 shareholders
• 28% of Cool Link (Holdings) is held by insiders

To get a sense of who is truly in control of Cool Link (Holdings) Limited (HKG:8491), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 28% came under pressure after market cap dropped to HK$793m last week,retail investors took the most losses.

Let's delve deeper into each type of owner of Cool Link (Holdings), beginning with the chart below.

View our latest analysis for Cool Link (Holdings)

What Does The Lack Of Institutional Ownership Tell Us About Cool Link (Holdings)?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Cool Link (Holdings), for yourself, below.

We note that hedge funds don't have a meaningful investment in Cool Link (Holdings). Looking at our data, we can see that the largest shareholder is Elephant International Holdings Group Limited with 15% of shares outstanding. Yi Tian is the second largest shareholder owning 10.0% of common stock, and Guixian Guo holds about 6.7% of the company stock. Guixian Guo, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Teo Siong Gay is the owner of 5.4% of the company's shares.

On studying our ownership data, we found that 6 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Cool Link (Holdings)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Cool Link (Holdings) Limited. Insiders have a HK$226m stake in this HK$793m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 57% stake in Cool Link (Holdings), suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 15%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Cool Link (Holdings) better, we need to consider many other factors. Take risks for example - Cool Link (Holdings) has 4 warning signs (and 3 which are potentially serious) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.