Private equity firms invested in CureVac N.V. (NASDAQ:CVAC) copped the brunt of last week’s US$335m market cap decline

Private equity firms invested in CureVac N.V. (NASDAQ:CVAC) copped the brunt of last week’s US$335m market cap decline

If you want to know who really controls CureVac N.V. (NASDAQ:CVAC), then you’ll have to look at the makeup of its share registry. We can see that private equity firms own the lion’s share in the company with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private equity firms endured the biggest losses as the stock fell by 15%.

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

However if you’d rather see where the opportunities and risks are within CVAC’s industry, you can check out our analysis on the US Biotechs industry.

ownership-breakdown
NasdaqGM:CVAC Ownership Breakdown August 28th 2022

What Does The Institutional Ownership Tell Us About CureVac?

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 CureVac 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. 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 CureVac’s historic earnings and revenue below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
NasdaqGM:CVAC Earnings and Revenue Growth August 28th 2022

We note that hedge funds don’t have a meaningful investment in CureVac. dievini Hopp BioTech holding GmbH & Co. KG is currently the company’s largest shareholder with 38% of shares outstanding. KfW, Asset Management Arm is the second largest shareholder owning 16% of common stock, and GSK plc holds about 8.0% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.

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 CureVac

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in CureVac N.V.. This is a big company, so it is good to see this level of alignment. Insiders own US$173m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public– including retail investors — own 25% stake in the company, and hence can’t easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 38%, private equity firms could influence the CureVac board. 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.

Public Company Ownership

We can see that public companies hold 8.0% of the CureVac shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand CureVac better, we need to consider many other factors. Case in point: We’ve spotted 2 warning signs for CureVac you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.

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