Key Insights

• Significant control over Nextdoor Holdings by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 9 investors have a majority stake in the company with 51% ownership
• 12% of Nextdoor Holdings is held by insiders

A look at the shareholders of Nextdoor Holdings, Inc. (NYSE:KIND) can tell us which group is most powerful. The group holding the most number of shares in the company, around 31% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 29% came under pressure after market cap dropped to US$987m last week,individual investors took the most losses.

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

What Does The Institutional Ownership Tell Us About Nextdoor Holdings?

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.

Nextdoor Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Nextdoor Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Nextdoor Holdings. The company's largest shareholder is Benchmark, with ownership of 13%. For context, the second largest shareholder holds about 8.5% of the shares outstanding, followed by an ownership of 6.5% by the third-largest shareholder. Nirav Tolia, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Nextdoor Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Nextdoor Holdings, Inc.. It has a market capitalization of just US$987m, and insiders have US$114m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Nextdoor Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 28%, private equity firms could influence the Nextdoor Holdings board. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Nextdoor Holdings that you should be aware of.

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.