Key Insights

• Institutions' substantial holdings in Block implies that they have significant influence over the company's share price

• The top 25 shareholders own 49% of the company

• Recent sales by insiders

Every investor in Block, Inc. (NYSE:SQ) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 63% 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.

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

View our latest analysis for Block

What Does The Institutional Ownership Tell Us About Block?

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.

Block already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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. We note that hedge funds don't have a meaningful investment in Block. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Block's case, its Top Key Executive, Jack Dorsey, is the largest shareholder, holding 7.9% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 7.4% of common stock, and BlackRock, Inc. holds about 5.1% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.