Key Insights

• Significant insider control over Rumble implies vested interests in company growth
• The top 4 shareholders own 52% of the company
• Insiders have sold recently

Every investor in Rumble Inc. (NASDAQ:RUM) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company. Following last week's 7.5% decline in share price, the group also suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Rumble.

What Does The Institutional Ownership Tell Us About Rumble?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Rumble. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Rumble, (below). Of course, keep in mind that there are other factors to consider, too.

Rumble is not owned by hedge funds. With a 37% stake, CEO Christopher Pavlovski is the largest shareholder. For context, the second largest shareholder holds about 5.8% of the shares outstanding, followed by an ownership of 5.3% by the third-largest shareholder. Interestingly, the third-largest shareholder, Robert Arsov is also a Lead Director, again, indicating strong insider ownership amongst the company's top shareholders.

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.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Rumble

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 the majority of Rumble Inc.. This means they can collectively make decisions for the company. That means insiders have a very meaningful US$834m stake in this US$1.6b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Rumble. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 Rumble that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com