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The considerable ownership by private equity firms in Coveo Solutions indicates that they collectively have a greater say in management and business strategy
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A total of 4 investors have a majority stake in the company with 53% ownership
If you want to know who really controls Coveo Solutions Inc. (TSE:CVO), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 27% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, private equity firms endured the biggest losses as the stock fell by 20%.
Let’s take a closer look to see what the different types of shareholders can tell us about Coveo Solutions.
View our latest analysis for Coveo Solutions
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Coveo Solutions. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Coveo Solutions’ historic earnings and revenue below, but keep in mind there’s always more to the story.
It would appear that 19% of Coveo Solutions shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Elliott Management Corporation is currently the largest shareholder, with 19% of shares outstanding. Fonds de solidarité FTQ is the second largest shareholder owning 14% of common stock, and Investissement Québec, Investment Arm holds about 13% of the company stock. In addition, we found that Louis Tetu, the CEO has 3.9% of the shares allocated to their name.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company’s decision-making.