Key Insights

• Insiders appear to have a vested interest in RumbleOn's growth, as seen by their sizeable ownership
• The top 3 shareholders own 55% of the company
• Institutions own 18% of RumbleOn

To get a sense of who is truly in control of RumbleOn, Inc. (NASDAQ:RMBL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So it follows, every decision made by insiders of RumbleOn regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of RumbleOn.

See our latest analysis for RumbleOn

What Does The Institutional Ownership Tell Us About RumbleOn?

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.

RumbleOn already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 RumbleOn's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 27% of RumbleOn. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Stone House Capital Management, LLC, with ownership of 19%. With 18% and 18% of the shares outstanding respectively, Mark Tkach and William Coulter are the second and third largest shareholders. William Coulter, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 RumbleOn

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.

Our most recent data indicates that insiders own a reasonable proportion of RumbleOn, Inc.. Insiders own US$60m worth of shares in the US$160m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over RumbleOn. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 3.5%, of the RumbleOn stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand RumbleOn better, we need to consider many other factors. Be aware that RumbleOn is showing 1 warning sign in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.