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Who Really Owns ProQR Therapeutics NV (PRQR)?
Veer Mallick August 15, 2017
In this article, I will take a quick look at ProQR Therapeutics NV’s (NASDAQ:PRQR) recent ownership structure – an unconventional investing subject, but an important one. When it comes to ownership structure of a company, the impact has been observed in both the long-and short-term performance of shares. The same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, which is a decisive factor for a long-term investor. It also impacts the trading environment of company shares, which is more of a concern for short-term investors. Therefore, it is beneficial for us to examine PRQR’s ownership structure in more detail.
See our latest analysis for PRQR
NasdaqGM:PRQR Ownership_summary Aug 15th 17
NasdaqGM:PRQR Ownership_summary Aug 15th 17
Institutional Ownership
PRQR’s 23.82% institutional ownership seems enough to cause large share price movements in the case of significant share sell-off or acquisitions by institutions, particularly when there is a low level of public shares available on the market to trade. Although PRQR has a high institutional ownership, such stock moves, in the short-term, are more commonly linked to a particular type of active institutional investors – hedge funds. Hedge funds, considered active investors, hold a 6.20% stake in the company, which may be the cause of high short-term volatility in the stock price. We should dig deeper into the company’s ownership structure to find how the rest of its ownership structure can impact its investment case.
Insider Ownership
Another important group of shareholders are company insiders. Insider ownership has to do more with how the company is managed and less to do with the direct impact of the magnitude of shares trading on the market. With 8.22% ownership, PRQR insiders is an important ownership type. An insider stake of this level indicates that executives are highly aligned with the shareholders as both stand to gain when the value of the company rises. It may be interesting to see what insiders have been doing with their shares lately. Insiders buying shares can be a positive indicator of future performance, but a selling decision can be simply driven by personal financial needs.
General Public Ownership
A substantial ownership of 35.54% in PRQR is held by the general public. With this size of ownership, retail investors can collectively play a role in major company policies that affect shareholders returns, including executive remuneration and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.
Private Equity Ownership
Private equity firms hold a 26.23% stake in PRQR. With a stake of this size, they can be influential in key policy decisions. This is a positive sign for potential investors as these firms play an important role in aligning company policy with shareholder returns.
Final words
With significant institutional ownership, including active hedge, I believe potential investors should seek enough margin of safety when considering an investment in PRQR. This will allow an investor to reduce the impact of non-fundamental factors, such as volatile block trading impact on their portfolio value. However, other important factors we must never forget to assess are the fundamentals. I recommend you take a look at our latest free analysis report on ProQR Therapeutics N.V to see PRQR’s fundamentals and whether it could be considered an undervalued opportunity.
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