Key Insights

• JD.com's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public

• A total of 25 investors have a majority stake in the company with 34% ownership

• 11% of JD.com is held by insiders

A look at the shareholders of JD.com, Inc. (NASDAQ:JD) can tell us which group is most powerful. With 50% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 39% shares weren’t spared from last week’s US$4.8b market cap drop, retail investors as a group suffered the maximum losses

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

View our latest analysis for JD.com

What Does The Institutional Ownership Tell Us About JD.com?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that JD.com 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of JD.com, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in JD.com. Our data suggests that Qiangdong Liu, who is also the company's Top Key Executive, holds the most number of shares at 11%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 3.7% and 3.3%, of the shares outstanding, respectively.

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 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.