Key Insights

• The considerable ownership by private equity firms in SkyWater Technology indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 4 shareholders
• Insider ownership in SkyWater Technology is 25%

To get a sense of who is truly in control of SkyWater Technology, Inc. (NASDAQ:SKYT), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 27% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of private equity firms took a hit after last week's 11% price drop, insiders with their 25% also suffered.

Let's delve deeper into each type of owner of SkyWater Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About SkyWater Technology?

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.

SkyWater Technology 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at SkyWater Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in SkyWater Technology. The company's largest shareholder is Oxbow Industries, LLC, with ownership of 27%. In comparison, the second and third largest shareholders hold about 11% and 9.1% of the stock. Furthermore, CEO Thomas Sonderman is the owner of 0.9% of the company's shares.

On looking further, we found that 51% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SkyWater Technology

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.

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.

It seems insiders own a significant proportion of SkyWater Technology, Inc.. Insiders have a US$118m stake in this US$465m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in SkyWater Technology. 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 Equity Ownership

Private equity firms hold a 27% stake in SkyWater Technology. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SkyWater Technology better, we need to consider many other factors. Take risks for example - SkyWater Technology has 2 warning signs (and 1 which is concerning) we think you should know about.

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.