News
Institutional owners may consider drastic measures as Joby Aviation, Inc.’s (NYSE:JOBY) recent $418 million loss adds to long-term losses
Key Insights
-
Given the large institutional ownership of the stock, Joby Aviation’s share price may be vulnerable to their trading decisions.
-
50% of the business is held by the 6 largest shareholders
A Look at the Shareholders of Joby Aviation, Inc. (NYSE:JOBY) can tell us which group is more powerful. With a 34% stake, institutions own the most shares in the company. In other words, the group stands to gain more (or lose more) from its investment in the company.
As a result, institutional investors suffered the biggest losses last week after the market capitalization fell by $418 million. This set of investors may be especially concerned about the current loss, which adds to a 30% loss in a year for shareholders. Often referred to as “market movers,” institutions wield significant power to influence the price dynamics of any given stock. As a result, if the decline continues, institutional investors may be pressured to sell Joby Aviation, which could hurt individual investors.
Let’s dive deeper into each type of Joby Aviation owner, starting with the chart below.
See our latest review for Joby Aviation
property distribution
What does institutional ownership tell us about Joby Aviation?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock when it is included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Joby Aviation already has institutions on the stock registry. In fact, they have a respectable stake in the company. This may indicate that the company has a certain degree of credibility in the investment community. However, it is best to be careful when relying on the supposed validation that comes with institutional investors. They can be wrong sometimes. It is not uncommon to see a big drop in the share price if two large institutional investors try to sell a stock at the same time. Therefore, it is worth checking Joby Aviation’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
earnings-and-revenue-growth
We note that hedge funds do not have a significant investment in Joby Aviation. The company’s CEO, JoeBen Bevirt, is the largest shareholder, with 13% of the outstanding shares. For context, the second-largest shareholder holds about 10% of the outstanding shares, followed by an 8.5% ownership by the third-largest shareholder. Interestingly, the third-largest shareholder, Paul Sciarra, is also the chairman of the board, again indicating strong insider ownership among the company’s major shareholders.
The story continues
Upon further analysis, we found that more than half of the company’s shares are owned by the six largest shareholders, suggesting that the interests of the larger shareholders are balanced to some extent by the smaller ones.
While studying institutional ownership of a company can add value to your research, it’s also a good practice to research analyst recommendations to better understand a stock’s expected performance. There are plenty of analysts covering the stock, so it may be worth seeing what they’re predicting as well.
Joby Aviation Internal Property
The definition of company insiders can be subjective and varies between jurisdictions. Our data reflects individual insiders, capturing board members at a minimum. Company management runs the business, but the CEO will report to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it harder for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders hold a significant stake in Joby Aviation, Inc.. Insiders own $1.0 billion worth of shares in the $4.4 billion company. That’s quite significant. Most would be pleased to see the board investing alongside them. You may wish to access this free chart showing recent insider trading.
General Public Property
The general public — including retail investors — owns a 23% stake in the company and therefore cannot be easily ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private equity ownership
With a 5.7% stake, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors may be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see value in the company. Alternatively, these holders may be exiting the investment after it goes public.
Ownership of a public company
Public companies currently hold 12% of Joby Aviation shares. It’s hard to say for sure, but it suggests they have intertwined business interests. This could be a strategic move, so it’s worth keeping an eye on this space for any changes in ownership.
Next steps:
While it is worth considering the different groups that own a company, there are other factors that are even more important. For example, we found 4 Warning Signs for Joby Aviation (1 is a bit worrying!) that you should know before investing here.
Ultimately the future is the most important. You can access this free report on analysts’ forecasts for the company.
NB: The figures in this article are calculated using data from the last twelve months, which refers to the 12-month period ending on the last date of the month in which the financial statement is dated. This may not be consistent with the figures in the annual report for the full year.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your objectives or financial situation. Our aim is to bring you long-term focused analysis, driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, send an email editorial-team@simplywallst.com