• Given the large stake in the stock by institutions, Block's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 20 shareholders

To get a sense of who is truly in control of Block, Inc. it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 64% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or loses the most if there is a downturn).

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. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

What Does The Institutional Ownership Tell Us About Block?

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.

Block already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Block's earnings history below. Of course, the future is what really matters.

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 a meaningful investment in Block. Because actions speak louder than words, it is a good sign when insiders own a significant stake in a company. In Block's case, its President, Jack Dorsey, is the largest shareholder, holding 8.0% of shares outstanding. For context, the second-largest shareholder holds about 5.8% of the shares outstanding, followed by ownership of 5.4% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Block

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 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.

General Public Ownership

The general public-- including retail investors -- owns a 26% 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.