Now that you’re familiar with the concepts of stock exchanges, it’s time to focus on a single stock. In later exercises you’ll decide on some stocks to include in your (mock) portfolio but for now, you’ll use this as an opportunity to familiarise yourself with how stock ownership is structured.

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As we covered in the course, the main types of people buying stocks on the exchanges are:

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• Retail investors - every day investors, individual who decide to invest in the stock market
• Institutional investors - large organization managing pooled funds for various different clients
• Day traders - individuals or firms buying and selling stocks on the same day to pocket the profit

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Why is understanding the ownership structure of a stock helpful for investors? 

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Understanding the ownership structure of a stock is important for investors for several key reasons including:

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1. Corporate governance and decision-making: The ownership structure influences how the company is governed and major decisions are made. Companies with concentrated ownership may have different priorities and decision-making processes compared to those with dispersed ownership.
2. Dividend policy: Large shareholders or certain ownership structures may prefer different dividend policies, affecting potential returns for investors.
3. Takeover potential: The ownership structure impacts the likelihood and feasibility of potential takeovers or activist investor campaigns.
   

Instructions

Select a Major Stock:

• Choose one major publicly traded company that interests you.
• Ensure that the company is listed on a major stock exchange (e.g., NYSE, NASDAQ, LSE).

Gathering Information:

• Company Name and Ticker Symbol: Note down the full name and ticker symbol of the selected company.

Ownership Information: Look up the ownership structure of the company. This typically includes:

• Institutional Ownership: Percentage of shares held by institutional investors such as mutual funds, pension funds, and insurance companies.
• Insider Ownership: Percentage of shares held by insiders, including executives, directors, and employees.
• Public Ownership: Percentage of shares held by retail investors and the general public.
• Major Shareholders: Identify the top 5-10 shareholders and their respective ownership percentages.

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Sources and Data Collection:

• Use credible sources such as the company's annual reports, SEC filings (e.g., 10-K, 14A), financial news websites, or investor relations pages.
• Record the sources of your information for each data point.

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Document Your Findings:

Create a table to record the following details for your selected company:

• Company Name
• Ticker Symbol
• Institutional Ownership (%)
• Insider Ownership (%)
• Public Ownership (%)
• Major Shareholders and their ownership percentages
• Total number of outstanding shares

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Analyze

Analyze the ownership structure and consider the following:

• How concentrated is the ownership? (e.g., Is it widely held or dominated by a few large shareholders?)
• What might the ownership structure indicate about the company’s governance and control?
• Are there any notable changes or trends in the ownership structure over recent years?

Example

Here’s an example which shows the ownership structure of Pinterest taken from Yahoo Finance for example:

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Here’s a breakdown of the top institutional holders of Pinterset:

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