Can Kairos Acquisition Corp.’s (NASDAQ:CAIR) ownership structure tell us anything useful?

Large shareholder groups of Kairos Acquisition Corp. (NASDAQ:KAIR) have power over the company. Institutions often own shares in more established companies, though it’s not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what’s in your portfolio.”

With a market capitalization of $337 million, Kairos Acquisition is a small-cap stock, so it may not be well-known to many institutional investors. Taking a look at our data on the ownership groups (below), it appears that institutions own shares in the company. We can zoom in on the different ownership groups to learn more about Kairos Acquisition.

See our latest analysis for the Kairos acquisition

What does the company’s ownership structure tell us about the Kairos acquisition?

Institutional investors often compare their own returns to the returns of a commonly followed index. Therefore, they generally consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a large stake in the Kairos takeover. This suggests some credibility among professional investors. However, we can’t rely on this fact alone because institutions make bad investments sometimes, just like everyone else. If multiple institutions change their view on a stock at the same time, you could see the share price drop quickly. So it’s worth taking a look at Kairos Acquisition’s earnings history below. Of course, the future is what really matters.

Hedge funds appear to own 23% of Kairos Acquisition. This is interesting because hedge funds can be quite active and activist. Many are looking for medium-term catalysts that will drive the stock higher. Hudson Structured Capital Management Ltd. is currently the company’s largest shareholder with 11% of the shares. Meanwhile, the second and third largest shareholders hold 8.6% and 6.7% of the shares outstanding, respectively. Peter Bang, the second largest shareholder, also holds the title of CEO.

Upon further investigation, we discovered that the top 15 shareholders collectively own 51% of the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it’s also worth examining analyst sentiments to know which way the wind is blowing. As far as I know, there is no analyst coverage of this company, so it is probably being overlooked.

Insider Trading in Kairos Acquisition

The definition of an insider may vary slightly from country to country, but board members always count. The board is ultimately accountable to the board of directors. However, it is not uncommon for managers to serve as board members, especially if they are the founder or CEO.

Most view insider ownership as a positive because it can indicate that management is well aligned with other shareholders. However, in some cases, too much power is concentrated in this group.

I can report that insiders own shares of Kairos Acquisition Corp. In their own names, insiders own US$29 million worth of US$337 million worth of stock in the company. It’s good to see some insider investing, but it’s worth checking if insiders have been buying.

Public property

With 25% ownership, the general public has some degree of influence over Kairos Acquisition. While this group can’t necessarily give orders, they can certainly have a real impact on how your business is run.

Next steps:

While it’s worth considering the different groups that own a company, there are other factors that are even more important. Consider, for example, the ever-present specter of investment risk. We’ve identified 3 warning signs from Kairos Acquisition (at least 2 that apply) and understanding them should be part of your investment process.

Of course, you can find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

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

This article by Simply Wall St is of a general nature. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. Our articles are not intended to be financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative content. Simply Wall St has no position in any of the stocks mentioned.

Have an opinion on this article? Worried about content? contact with us directly. You can also send an email to editorial-team (at) simplywallst.com.