Welsbach Technology Metals Acquisition Corp. (NASDAQ:WTMA) has caught the attention of institutional investors who hold a sizeable 41% stake

Key Insights

• Significantly high institutional ownership implies Welsbach Technology Metals Acquisition's stock price is sensitive to their trading actions

• The top 6 shareholders own 53% of the company

• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Welsbach Technology Metals Acquisition Corp. (NASDAQ:WTMA) can tell us which group is most powerful. The group holding the most number of shares in the company, around 41% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's take a closer look to see what the different types of shareholders can tell us about Welsbach Technology Metals Acquisition.

Check out our latest analysis for Welsbach Technology Metals Acquisition

What Does The Institutional Ownership Tell Us About Welsbach Technology Metals Acquisition?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Welsbach Technology Metals Acquisition already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Welsbach Technology Metals Acquisition, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 28% of Welsbach Technology Metals Acquisition. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Welsbach Acquisition Holdings LLC is currently the company's largest shareholder with 18% of shares outstanding. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 7.5% by the third-largest shareholder.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Welsbach Technology Metals Acquisition

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 most recent data indicates that insiders own less than 1% of Welsbach Technology Metals Acquisition Corp.. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than US$479k worth of shares in the US$105m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Welsbach Technology Metals Acquisition. 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 Company Ownership

We can see that Private Companies own 18%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Welsbach Technology Metals Acquisition (of which 3 are potentially serious!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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