Fold Holdings, Inc.'s (NASDAQ:FLD) largest shareholders are private companies who were rewarded as market cap surged US$31m last week

Key Insights

• Fold Holdings' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 4 shareholders
• Insiders own 21% of Fold Holdings

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If you want to know who really controls Fold Holdings, Inc. (NASDAQ:FLD), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 29% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 15% gain.

Let's delve deeper into each type of owner of Fold Holdings, beginning with the chart below.

Check out our latest analysis for Fold Holdings

What Does The Institutional Ownership Tell Us About Fold Holdings?

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.

Fold Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Fold Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Fold Holdings is not owned by hedge funds. The company's largest shareholder is Emerald ESG Sponsor, LLC, with ownership of 15%. Fulgur Frontier Capital Lp is the second largest shareholder owning 14% of common stock, and Ten 31 holds about 11% of the company stock. Additionally, the company's CEO William Reeves directly holds 10% of the total shares outstanding.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Fold Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 a reasonable proportion of Fold Holdings, Inc.. Insiders own US$43m worth of shares in the US$204m company. 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 16% stake in Fold Holdings. 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.

Private Equity Ownership

Private equity firms hold a 28% stake in Fold Holdings. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 29%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Fold Holdings (3 make us uncomfortable!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.