Key Insights

• The considerable ownership by individual investors in Vistagen Therapeutics indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 7 shareholders
• Institutional ownership in Vistagen Therapeutics is 25%

To get a sense of who is truly in control of Vistagen Therapeutics, Inc. (NASDAQ:VTGN), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 31% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, individual investors benefitted the most after the company's market cap rose by US$29m last week.

Let's delve deeper into each type of owner of Vistagen Therapeutics, beginning with the chart below.

Check out our latest analysis for Vistagen Therapeutics

What Does The Institutional Ownership Tell Us About Vistagen Therapeutics?

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 Vistagen Therapeutics. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Vistagen Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 27% of Vistagen Therapeutics shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that TCG Crossover Management, LLC is the largest shareholder with 9.9% of shares outstanding. BVF Partners L.P. is the second largest shareholder owning 7.4% of common stock, and Great Point Partners, LLC holds about 6.9% of the company stock.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Vistagen Therapeutics

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 information suggests that Vistagen Therapeutics, Inc. insiders own under 1% of the company. It seems the board members have no more than US$206k worth of shares in the US$124m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vistagen Therapeutics. 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.

Private Equity Ownership

Private equity firms hold a 17% stake in Vistagen Therapeutics. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for Vistagen Therapeutics you should be aware of, and 2 of them are a bit concerning.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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.