In the wake of Cytek Biosciences, Inc.’s (NASDAQ:CTKB) latest US$51m market cap drop, institutional owners may be forced to take severe actions

Important Findings

• The institutions’ sizable holdings in Cytek Biosciences imply that they have a significant impact on the company’s share price
• 50% of the company is held by the top 8 shareholders
• Insiders own 12% of Cytek Biosciences

A look at Cytek Biosciences, Inc. (NASDAQ:CTKB) shareholders can tell us which group is the strongest. With a 38% share, institutions own the maximum shares in the company. That is, the group will benefit most when the stock goes up (or lose most when it goes down).

It follows that institutional investors were the hardest-hit group after the company’s market cap fell 3.3% to $1.5 billion last week following a fall in the share price. The recent loss, which adds to a 16% annual loss for shareholders, may not sit well with this group of investors. Institutions, also known as “smart money,” have a huge impact on how a stock’s price moves. Therefore, if the decline continues, institutional investors could be pressured to sell Cytek Biosciences, which could hurt individual investors.

Let’s take a closer look at what the different types of shareholders can tell us about Cytek Biosciences.

Check out our latest analysis for Cytek Biosciences

What Does Institutional Ownership Tell Us About Cytek Biosciences?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. As such, they typically consider buying larger companies that are included in the relevant benchmark index.

Cytek Biosciences already has institutions on its share register. In fact, they own a respectable stake in the company. This means that the analysts who work for these institutes have looked at the stock and like it. But just like everyone else, they can be wrong. When multiple institutions own a stock, there is always a risk that they will find themselves in a “crowded trade”. When such a trade goes awry, multiple parties can compete to sell shares quickly. This risk is higher in a company without a growth history. You can see Cytek Biosciences historical earnings and earnings below, but remember there’s still more to be told.

Hedge funds don’t have many stakes in Cytek Biosciences. RA Capital Management, LP is currently the largest shareholder with 9.9% of the outstanding shares. Hillhouse Investment Management, Ltd. holds 6.4% and 6.2% of the outstanding shares, respectively. and BlackRock, Inc. the second and third largest shareholders. In addition, CEO Wenbin Jiang owns 5.7% of the company’s shares.

Upon further examination, we found that more than half of the company’s stock is owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by the smaller ones.

Studying institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be done by studying analyst sentiment. Quite a few analysts cover the stock, so you can easily look at the projected growth.

Insider ownership of Cytek Biosciences

The definition of an insider may differ slightly from country to country, but board members always count. Management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

In general, I think insider ownership is a good thing. In some cases, however, it becomes more difficult for other shareholders to hold the board accountable for decisions.

It appears that insiders own a significant stake in Cytek Biosciences, Inc. It’s very interesting to see that insiders have a significant $177 million stake in this $1.5 billion deal. Most would be happy to see the board investing alongside them. You might want to access this free chart showing recent insider trading.

General Public Property

With 23% ownership, the general public, made up mostly of individual investors, has some influence on Cytek Biosciences. While this ownership size is substantial, it may not be enough to change company policy if the decision is not aligned with other major shareholders.

Private Equity Ownership

Private equity firms own a 22% stake in Cytek Biosciences. This indicates that they can influence important political decisions. Some might like that because sometimes private equity are activists who hold management accountable. But sometimes private equity sells out after the company goes public.

Private company property

Our data shows that private companies own 4.9% of the company’s shares. It might be worth exploring in more detail. If related parties, such as insiders, have interests in any of these private companies, this should be disclosed in the annual report. Private companies can also have a strategic interest in the company.

Next Steps:

While it’s worth considering the different groups that own a business, there are other factors that are even more important.

I like to dive deeper how a company has developed in the past. In it you will find historical earnings and earnings detailed graphics.

Ultimately the future is the most important thing. You can access it free Report on analysts forecasts for the company.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

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This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.