Every investor in Roblox Corporation (NYSE:RBLX) should be aware of the most powerful shareholder groups.  We can see that institutions own the lion's share in the company with 54% ownership.   In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors.  Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.  

In the chart below, we zoom in on the different ownership groups of Roblox.

See our latest analysis for Roblox

NYSE:RBLX Ownership Breakdown January 27th 2023

What Does The Institutional Ownership Tell Us About Roblox?

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.

Roblox already has institutions on the share registry. Indeed, they own a respectable stake in the company.  This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong.  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 Roblox's historic earnings and revenue below, but keep in mind there's always more to the story.

NYSE:RBLX Earnings and Revenue Growth January 27th 2023

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences.    Roblox is not owned by hedge funds.      Altos Ventures Management, Inc. is currently the company's largest shareholder with 13% of shares outstanding.        For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 6.1% by the third-largest shareholder.     David Baszucki, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.      

After doing some more digging, we found that the top 11 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.  

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments.   There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.  

Insider Ownership Of Roblox

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.  Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Roblox Corporation.   It is very interesting to see that insiders have a meaningful US$2.7b stake in this US$22b business.  It is good to see this level of investment. You can check here to see if those insiders have been buying recently.  

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored.   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 13% stake in Roblox. 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.  

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.    Take risks for example - Roblox has   4 warning signs  we think you should be aware of.  

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.