Fastly, Inc.’s (NYSE:FSLY) latest 3.7% drop adds to year-on-year losses, institutional investors may consider drastic action

Every investor in Fastly, Inc. (NYSE: FSLY) should know the most powerful shareholder groups. We can see that institutions hold the lion’s share of the business with 64% ownership. In other words, the group faces the maximum upside potential (or downside risk).

And institutional investors suffered the highest losses after the company’s share price fell 3.7% last week. Needless to say, the recent loss on top of a year-long loss for 79% shareholders might not go over well, especially with this category of shareholders. Often referred to as “market makers,” institutions wield significant power in influencing the price dynamics of any stock. Therefore, if the downtrend continues, institutions could come under pressure to sell Fastly, which could have negative implications for individual investors.

Let’s dive deeper into each owner type in Fastly, starting with the table below.

See our latest analysis for Fastly

NYSE: FSLY Ownership Breakdown July 12, 2022

What does institutional ownership quickly tell us?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

We can see that Fastly has institutional investors; and they own a good part of the shares of the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Fastly’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
NYSE: FSLY Earnings and Revenue Growth July 12, 2022

Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. We note that hedge funds have no significant investment in Fastly. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 7.7% of shares outstanding. Artur Bergman is the second largest shareholder with 7.3% of common stock and First Trust Advisors LP owns approximately 6.5% of the company’s stock. Artur Bergman, who is the second largest shareholder, also holds the title of Top Key Executive. Additionally, we found that Joshua Bixby, the CEO, has 0.5% of the shares attributed to his name.

A closer look at our ownership figures suggests that the top 18 shareholders hold a combined ownership of 51%, implying that no single shareholder has a majority.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Fastly Insider Ownership

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Shareholders would likely be interested to hear that insiders hold shares of Fastly, Inc. It’s a pretty big company, so it’s generally positive to see a potentially meaningful alignment. In this case, they own about $131 million worth of stock (at today’s prices). It’s good to see this level of investment by insiders. You can check here if these insiders have bought recently.

General public property

The general public, including retail investors, owns 27% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Be aware that Fastly displays 4 warning signs in our investment analysis you should know…

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

About William G.

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