A look at the shareholders of Esports Entertainment Group, Inc. (NASDAQ:GMBL) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.
Esports Entertainment Group is not a large company by global standards. It has a market capitalization of US$42m, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about Esports Entertainment Group.
What Does The Lack Of Institutional Ownership Tell Us About Esports Entertainment Group?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.
There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Esports Entertainment Group’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.
Esports Entertainment Group is not owned by hedge funds. Second Generation Holding Trust is currently the company’s largest shareholder with 40% of shares outstanding. Next, we have Shawn Erickson and VG-SPV, LLC as the second and third largest shareholders, holding 7.3% and 2.2%, of the shares outstanding, respectively.
Additionally, we found that 50% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of 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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Esports Entertainment Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the…
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