Key Insights

• The considerable ownership by public companies in DouYu International Holdings indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 55% ownership
• 17% of DouYu International Holdings is held by insiders

A look at the shareholders of DouYu International Holdings Limited (NASDAQ:DOYU) can tell us which group is most powerful. The group holding the most number of shares in the company, around 38% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, public companies were the biggest beneficiaries of last week's 22% gain.

Let's delve deeper into each type of owner of DouYu International Holdings, beginning with the chart below.

What Does The Institutional Ownership Tell Us About DouYu International 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.

As you can see, institutional investors have a fair amount of stake in DouYu International Holdings. 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 DouYu International Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in DouYu International Holdings. Tencent Holdings Limited is currently the largest shareholder, with 38% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder. Shaojie Chen, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of DouYu International Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of DouYu International Holdings Limited. It has a market capitalization of just US$365m, and insiders have US$63m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in DouYu International 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.

Public Company Ownership

Public companies currently own 38% of DouYu International Holdings stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

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