Key Insights

• Significant control over Rackspace Technology by private equity firms implies that the general public has more power to influence management and governance-related decisions
• Apollo Global Management, Inc. owns 57% of the company
• Institutions own 22% of Rackspace Technology

If you want to know who really controls Rackspace Technology, Inc. (NASDAQ:RXT), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of private equity firms took a hit after last week’s 12% price drop, institutions with their 22% holdings also suffered.

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

View our latest analysis for Rackspace Technology

What Does The Institutional Ownership Tell Us About Rackspace Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Rackspace Technology does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Rackspace Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Rackspace Technology. Apollo Global Management, Inc. is currently the largest shareholder, with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 6.0% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder. Furthermore, CEO Amar Maletira is the owner of 2.2% of the company's shares.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Rackspace Technology

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Rackspace Technology, Inc.. In their own names, insiders own US$54m worth of stock in the US$551m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rackspace Technology. 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 57% stake in Rackspace Technology. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Rackspace Technology better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Rackspace Technology you should be aware of, and 1 of them is potentially serious.

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.