Key Insights
- Significantly high institutional ownership implies Vertical Aerospace's stock price is sensitive to their trading actions
- The largest shareholder of the company is Mudrick Capital Management, L.P. with a 61% stake
- Insiders own 18% of Vertical Aerospace
To get a sense of who is truly in control of Vertical Aerospace Ltd. (NYSE:EVTL), it is important to understand the ownership structure of the business. We can see that hedge funds own the lion's share in the company with 61% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Hedge funds investors would appreciate the 15% increase in share price last week, given their one-year losses have totalled a disappointing 16%.
Let's delve deeper into each type of owner of Vertical Aerospace, beginning with the chart below.
Check out our latest analysis for Vertical Aerospace
What Does The Institutional Ownership Tell Us About Vertical Aerospace?
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.
We can see that Vertical Aerospace 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. 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 Vertical Aerospace's historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 61% of Vertical Aerospace shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's largest shareholder is Mudrick Capital Management, L.P., with ownership of 61%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 18% and 5.0%, of the shares outstanding, respectively. Stephen Fitzpatrick, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Vertical Aerospace
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer 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 more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Vertical Aerospace Ltd.. Insiders have a US$90m stake in this US$488m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Vertical Aerospace better, we need to consider many other factors. Case in point: We've spotted 6 warning signs for Vertical Aerospace you should be aware of, and 5 of them are a bit unpleasant.
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.