Quantum-Si Incorporated’s (NASDAQ:QSI) Share Price Dropped 9.6% Last Week; individual investors would not be happy

Every investor in Quantum-Si Incorporated (NASDAQ:QSI) should know the most powerful shareholder groups. We can see that individual investors hold the lion’s share of the company with 39% ownership. In other words, the group faces the maximum upside potential (or downside risk).

While insiders, who own 27% of the shares, were not spared by the market capitalization drop of US$58 million last week, individual investors as a group suffered the maximum losses.

Let’s dive deeper into each Quantum-Si owner type, starting with the table below.

See our latest analysis for Quantum-Si

NasdaqGM: QSI Ownership Breakdown May 7, 2022

What does institutional ownership tell us about Quantum-Si?

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 hold a sizeable share of Quantum-Si. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Quantum-Si’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
NasdaqGM: QSI Earnings and Revenue Growth May 7, 2022

We note that hedge funds have no significant investment in Quantum-Si. Looking at our data, we can see that the largest shareholder is CEO Jonathan Rothberg with 26% of the shares outstanding. In comparison, the second and third shareholders hold approximately 9.6% and 6.1% of the shares.

We also observed that the top 7 shareholders represent more than half of the share register, with some small shareholders to balance the interests of the larger ones to some extent.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There is some analyst coverage of the stock, but it could still become better known over time.

Insider Ownership of Quantum-Si

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Our most recent data indicates that insiders hold a reasonable amount of embedded Quantum-Si. Its market capitalization is just US$549 million and insiders hold US$147 million worth of shares in their own name. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.

General public property

The general public, including retail investors, owns 39% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private equity ownership

The private equity firms hold a 6.1% stake in Quantum-Si. This suggests that they can influence key policy decisions. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. Take risks for example – Quantum-Si a 4 warning signs (and 1 of concern) that we think you should know about.

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson