Key Insights

• The considerable ownership by retail investors in Bitfarms indicates that they collectively have a greater say in management and business strategy
• 39% of the business is held by the top 25 shareholders
• Recent purchases by insiders

If you want to know who really controls Bitfarms Ltd. (TSE:BITF), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 22% came under pressure after market cap dropped to CA$1.2b last week,retail investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Bitfarms.

View our latest analysis for Bitfarms

What Does The Institutional Ownership Tell Us About Bitfarms?

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.

As you can see, institutional investors have a fair amount of stake in Bitfarms. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Bitfarms' historic earnings and revenue below, but keep in mind there's always more to the story.

Bitfarms is not owned by hedge funds. Our data shows that Riot Platforms, Inc. is the largest shareholder with 20% of shares outstanding. With 3.5% and 2.0% of the shares outstanding respectively, Invesco Capital Management LLC and Heights Capital Management, Inc. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Bitfarms

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own less than 1% of Bitfarms Ltd.. It has a market capitalization of just CA$1.2b, and the board has only CA$305k worth of shares in their own names. 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

The general public, mostly comprising of individual investors, collectively holds 58% of Bitfarms shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

It appears to us that public companies own 20% of Bitfarms. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bitfarms better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Bitfarms (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

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.

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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.