Markforged Holding Corporation (NYSE:MKFG) surges 11%; private equity firms who own 37% shares profited along with institutions

Markforged Holding Corporation Common Stock -7.19% Pre

Markforged Holding Corporation Common Stock





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Key Insights

  • Significant control over Markforged Holding by private equity firms implies that the general public has more power to influence management and governance-related decisions
  • The top 5 shareholders own 56% of the company
  • 31% of Markforged Holding is held by Institutions

A look at the shareholders of Markforged Holding Corporation (NYSE:MKFG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 37% 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).

While private equity firms were the group that benefitted the most from last week’s US$15m market cap gain, institutions too had a 31% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Markforged Holding.

View our latest analysis for Markforged Holding

NYSE:MKFG Ownership Breakdown December 29th 2023

What Does The Institutional Ownership Tell Us About Markforged Holding?

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 Markforged Holding. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Markforged Holding's historic earnings and revenue below, but keep in mind there's always more to the story.

NYSE:MKFG Earnings and Revenue Growth December 29th 2023

It looks like hedge funds own 8.8% of Markforged Holding shares. 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. Matrix Management Corporation is currently the company's largest shareholder with 15% of shares outstanding. North Bridge Venture Management Company, LLC is the second largest shareholder owning 15% of common stock, and ARK Investment Management LLC holds about 10% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Markforged Holding

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Markforged Holding Corporation. As individuals, the insiders collectively own US$7.1m worth of the US$154m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Markforged Holding. 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

Private equity firms hold a 37% stake in Markforged Holding. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 4.3%, of the Markforged Holding stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Markforged Holding you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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