What Insider Ownership Reveals About Stocks Like Tesla
What Insider Ownership Reveals About Tesla
Insiders and institutional investors hold certain portions of the outstanding shares of a company. Ideally, you want insiders to own enough of the outstanding shares to “have some skin in the game,” but not so many that a few people could control all the decisions.
With institutional investors (like mutual and hedge funds), it is fine if they own 50% or more, because they typically want the same things that you also want – to see the share price rise.
You will see lower professional investor holdings with smaller companies and penny stocks, because the big institutions usually can not buy small companies, of those with a low stock price.
Any time you want to invest in a company or stock, you should always look into the insider and institutional investor ownership positions.