Key Insights

• Significantly high institutional ownership implies Caribou Biosciences' stock price is sensitive to their trading actions

• 52% of the business is held by the top 10 shareholders

• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Caribou Biosciences, Inc. (NASDAQ:CRBU), then you'll have to look at the makeup of its share registry.  And the group that holds the biggest piece of the pie are institutions with 62% ownership.   In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors endured the highest losses last week after market cap fell by US$75m.  Needless to say, the recent loss which further adds to the one-year loss to shareholders of 55% might not go down well especially with this category of shareholders.   Often called "market movers", institutions wield significant power in influencing the price dynamics of any stock.  As a result, if the decline continues, institutional investors may be pressured to sell Caribou Biosciences which might hurt individual investors.    

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

NasdaqGS:CRBU Ownership Breakdown June 4th 2024

What Does The Institutional Ownership Tell Us About Caribou Biosciences?

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.

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

NasdaqGS:CRBU Earnings and Revenue Growth June 4th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences.    It would appear that 14% of Caribou Biosciences shares are controlled by hedge funds.  That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders.      Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 7.8% of shares outstanding.       With 7.2% and 7.0% of the shares outstanding respectively, PFM Health Sciences, LP and State Street Global Advisors, Inc. are the second and third largest shareholders.  

We did some more digging and found that 10 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.  

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 Caribou Biosciences

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.  Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Caribou Biosciences, Inc..   As individuals, the insiders collectively own US$2.8m worth of the US$260m 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 15% 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 Company Ownership

It seems that Private Companies own 3.7%, of the Caribou Biosciences stock.   It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.  

Public Company Ownership

Public companies currently own 5.2% of Caribou Biosciences stock.   We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.  

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.    For instance, we've identified   4 warning signs for Caribou Biosciences (1 is a bit concerning)  that 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.

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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.