Key Insights

• Blend Labs' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 17 shareholders own 50% of the company
• Institutional ownership in Blend Labs is 32%

Every investor in Blend Labs, Inc. (NYSE:BLND) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week's US$66m market cap gain, institutions too had a 32% share in those profits.

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

What Does The Institutional Ownership Tell Us About Blend Labs?

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.

Blend Labs 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. 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 Blend Labs' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Blend Labs. Our data shows that General Atlantic Service Company, L.P. is the largest shareholder with 7.6% of shares outstanding. Formation8 Partners, LLC is the second largest shareholder owning 6.4% of common stock, and 8VC holds about 5.3% of the company stock. Furthermore, CEO Nima Ghamsari is the owner of 3.8% of the company's shares.

A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Blend Labs

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.

Shareholders would probably be interested to learn that insiders own shares in Blend Labs, Inc.. As individuals, the insiders collectively own US$46m worth of the US$819m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 43% 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

With an ownership of 19%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Blend Labs better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Blend Labs .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.