Private equity firms among MeiraGTx Holdings plc’s (NASDAQ:MGTX) largest stockholders and were hit after last week’s 10% price drop

Key Insights

• Significant control over MeiraGTx Holdings by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 6 shareholders own 55% of the company
• 19% of MeiraGTx Holdings is held by Institutions

If you want to know who really controls MeiraGTx Holdings plc (NASDAQ:MGTX), 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 private equity firms with 28% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week’s 10% decline in share price, private equity firms suffered the most losses.

Let’s delve deeper into each type of owner of MeiraGTx Holdings, beginning with the chart below.

View our latest analysis for MeiraGTx Holdings

What Does The Institutional Ownership Tell Us About MeiraGTx Holdings?

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

MeiraGTx Holdings 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of MeiraGTx Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 15% of MeiraGTx Holdings shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Perceptive Advisors LLC is currently the company’s largest shareholder with 18% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 8.2% by the third-largest shareholder. Additionally, the company’s CEO Alexandria Forbes directly holds 2.2% of the total shares outstanding.

On further inspection, we found that more than half the company’s shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of MeiraGTx Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in MeiraGTx Holdings plc. As individuals, the insiders collectively own US$18m worth of the US$373m 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, who are usually individual investors, hold a 21% stake in MeiraGTx Holdings. 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

With an ownership of 28%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 5.3%, of the MeiraGTx Holdings stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 7.3% of MeiraGTx Holdings. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand MeiraGTx Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we’ve spotted 2 warning signs for MeiraGTx Holdings (of which 1 can’t be ignored!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.