What does the ownership structure of SES AI Corporation (NYSE: SES) look like?

The major shareholder groups of SES AI Corporation (NYSE: SES) have power over society. Insiders often own a large portion of younger, smaller companies, while larger companies tend to have institutions as shareholders. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.

SES AI isn’t huge, but it’s not particularly small either. It has a market capitalization of US$2.2 billion, which means it generally expects to see certain institutions listed on the stock register. Our analysis of societal ownership below shows that institutions own shares in society. Let’s take a closer look at what different types of shareholders can tell us about SES AI.

Check out our latest analysis for SES AI

distribution of property

distribution of property

What does institutional ownership tell us about SES AI?

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.

We see that SES AI has institutional investors; and they own a good part of the shares of the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. 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. It is therefore worth checking the past earnings trajectory of SES AI (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth

earnings-and-revenue-growth

We note that hedge funds have no significant investment in SES AI. SK Inc. is currently the largest shareholder, with 12% of the shares outstanding. In comparison, the second and third shareholders hold approximately 11% and 10.0% of the shares. Qichao Hu, who is the second largest shareholder, also holds the title of general manager.

Our research also shed light on the fact that approximately 52% of the company is controlled by the top 5 shareholders, suggesting that these owners wield significant influence over the company.

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. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.

Insider ownership of SES AI

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.

It appears that insiders hold a large share of SES AI Corporation. Insiders hold $274 million worth of stock in the $2.2 billion company. It is quite significant. Good to see this level of investment. You can check here if these insiders have bought recently.

General public property

The general public, including retail investors, owns 26% of the company’s capital and therefore cannot be easily ignored. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Private equity ownership

The private equity firms hold a 10.0% stake in SES AI. This suggests that they can influence key policy decisions. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Private Company Ownership

Private companies appear to hold 9.1% of SES AI shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Ownership of a public company

It appears to us that public companies hold 28% of SES AI. We cannot be sure, but it is quite possible that it is a strategic issue. Businesses can be similar or work together.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand SES AI, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 2 warning signs with SES AI (at least 1 which is concerning) and understanding them should be part of your investment process.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

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.

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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.

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