Are Spindletop Health Acquisition Corp. (NASDAQ:SHCA) majority-owned by insiders?

Any investor in Spindletop Health Acquisition Corp. (NASDAQ:SHCA) should be aware of the most powerful groups of shareholders. Insiders often own a large chunk of younger, smaller companies, while larger companies tend to have institutions as shareholders. I love to see at least a little bit of insider ownership. As Charlie Munger said, “Show me the incentive, and I’ll show you the result.”

Spindletop Health Acquisition is a smaller company with a market capitalization of $289 million, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let’s take a closer look at each type of owner to learn more about Spindletop Health Acquisition.

See our latest analysis for the Spindletop Health acquisition

What does the ownership structure tell us about the Spindletop Health acquisition?

Many institutions measure their performance against an index that approximates the local market. As a result, they tend to pay more attention to companies that are included in major indices.

We can see that Spindletop Health Acquisition does have institutional investors; and they own a significant portion of the company’s shares. This could indicate that the company has a certain degree of credibility in the investment community. However, it’s best to be cautious when relying on the supposed validation that comes with institutional investors. They, too, sometimes make mistakes. It’s not uncommon to see a big drop in the share price if two large institutional investors try to sell the stock at the same time. So it’s worth checking out Spindletop Health Acquisition’s past earnings trajectory (below). Of course, there are other factors to consider as well.

Institutional investors own over 50% of the company, so collectively they can likely have a strong influence on management decisions. It appears that 12% of Spindletop Health Acquisition shares are controlled by hedge funds. This is interesting because hedge funds can be quite active and activist. Many are looking for medium-term catalysts to drive the stock higher. The company’s CEO Evan Melrose is the largest shareholder with 17% of the shares outstanding. With 6.7% and 5.2% of the shares outstanding, Saba Capital Management, LP and Progeny 3, Inc. are the second and third largest shareholders, respectively.

A closer look at our ownership data shows that the top 11 shareholders collectively own 52% of the shares, meaning that no single shareholder has a majority of the shares.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. We are not currently considering any analyst coverage of the stock, so it is unlikely that the company is widely available.

Insider ownership of Spindletop Health acquisition

The definition of an insider may vary slightly by country, but board members always count. The board ultimately answers to the board. However, it is not uncommon for managers to be members of the executive board, especially if they are founders or CEOs.

I generally think that having insiders is a good thing. However, in some cases it makes it harder for other shareholders to hold management accountable for decisions.

Our information suggests that insiders maintain a significant interest in Spindletop Health Acquisition Corp. Insiders have a stake of $50m in this $289m business. We would say that this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have started the business. You can click here to see if these insiders have been buying or selling.

Public property

The general public, who are typically individual investors, own 10% of Spindletop Health Acquisition. While this group can’t necessarily give orders, they can certainly have a real impact on how the company is run.

Next steps:

I find it very interesting to look at who exactly owns a company. But to really gain insight, we need to consider other information as well. For example, we discovered 3 Warning Signs for Spindletop Health Acquisition (two that can’t be ignored!) that you should know about before investing here.

If you would rather check out another company – one with potentially better financials – don’t miss this one free list of interesting companies, supported by solid financial data.

NB: The figures in this article are calculated using the last twelve months of data, which refer 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 figures in the annual report for the full year.

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This Simply Wall St article is for general information purposes only. 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 stocks and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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