Institutions profited after Galaxy Digital Holdings Ltd.'s (TSE:GLXY) market cap rose CA$88m last week but individual investors profited the most

Simply Wall St · 10/18 15:53

Key Insights

  • Galaxy Digital Holdings' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • The top 25 shareholders own 19% of the company
  • Recent sales by insiders

To get a sense of who is truly in control of Galaxy Digital Holdings Ltd. (TSE:GLXY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 80% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 4.0% increase in the stock price last week, individual investors profited the most, but institutions who own 17% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Galaxy Digital Holdings.

View our latest analysis for Galaxy Digital Holdings

ownership-breakdown
TSX:GLXY Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Galaxy Digital Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Galaxy Digital Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Galaxy Digital Holdings' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TSX:GLXY Earnings and Revenue Growth October 18th 2024

Hedge funds don't have many shares in Galaxy Digital Holdings. Looking at our data, we can see that the largest shareholder is FMR LLC with 8.4% of shares outstanding. CI Global Asset Management is the second largest shareholder owning 2.7% of common stock, and Tidal Investments LLC holds about 1.4% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Galaxy Digital Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own some shares in Galaxy Digital Holdings Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CA$177m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 80% of Galaxy Digital Holdings. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Galaxy Digital Holdings better, we need to consider many other factors. Be aware that Galaxy Digital Holdings is showing 4 warning signs in our investment analysis , and 2 of those are significant...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.