With 74% ownership of the shares, Datadog, Inc. (NASDAQ:DDOG) is heavily dominated by institutional owners
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Key Insights
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Given the large stake in the stock by institutions, Datadog's stock price might be vulnerable to their trading decisions
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47% of the business is held by the top 25 shareholders
If you want to know who really controls Datadog, Inc. (NASDAQ:DDOG), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 74% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Datadog.
View our latest analysis for Datadog
What Does The Institutional Ownership Tell Us About Datadog?
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 can see that Datadog does have institutional investors; and they hold a good portion of the company's stock. 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 Datadog's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Datadog. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.9% and 2.8%, of the shares outstanding, respectively. Furthermore, CEO Olivier Pomel is the owner of 2.7% of the company's shares.
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.