Key Insights

• Significant control over Weave Communications by private equity firms implies that the general public has more power to influence management and governance-related decisions
• A total of 6 investors have a majority stake in the company with 51% ownership
• 36% of Weave Communications is held by Institutions

To get a sense of who is truly in control of Weave Communications, Inc. (NYSE:WEAV), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private equity firms with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 36% came under pressure after market cap dropped to US$776m last week,private equity firms took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Weave Communications.

What Does The Institutional Ownership Tell Us About Weave Communications?

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.

As you can see, institutional investors have a fair amount of stake in Weave Communications. 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 Weave Communications, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Weave Communications. CrossLink Capital, Inc. is currently the company's largest shareholder with 14% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 10% of the stock. In addition, we found that Brett White, the CEO has 0.9% of the shares allocated to their name.

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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Weave Communications

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can see that insiders own shares in Weave Communications, Inc.. In their own names, insiders own US$21m worth of stock in the US$776m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 43%, private equity firms could influence the Weave Communications board. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Weave Communications is showing 3 warning signs in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.