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Using approximately 9.1M shares outstanding as our base, 60.57% institutional ownership represents 5.51M shares. According to Yahoo Finance, there are 73 Institutional Investors at this time. Some sources have this value as high as 93 Institutional Investors (SOURCE). Also according to Yahoo Finance, 8.36% of the shares outstanding are currently held by insiders – 761K shares. There are a few different ways to look at this:
A) 68.93% (60.57% + 8.36%) are held by institutional investors and insiders. That is the majority of the shares at 6.27M. Conversely, only 31.07% of the total shares are not held by such investors and insiders and this represents 2.8M shares.
B) As you have learned from past articles, it is common practice to subtract the insider share count to come up with what many refer to as the ‘public float’. 9.1M shares less 761K shares = 8.3M shares in the public float.
C) Institutional Investors therefore own 66% of the public float (5.51M / 8.3M).
D) The short term effective public float is therefore only 2.79M. Remember, institutional investors can sell some or all of their position. However, with 73 such investors at time of writing and the possibility of AOI attracting the large Canadian ETFs and Funds, there is a greater probability that there will be a greater interest from institutional investors rather than reduced interest.
E) As a percentage of the total 9.1M shares outstanding, the effective public float of 2.79M is only 30.1% of that total shares outstanding.
F) NOTE: Depending on the source, Institutional Investors are reported to hold as much as 65% of the total shares outstanding. Using the NASDAQ value of 60.57% is therefore conservative and a conservative approach is typically the prudent approach. Similarly, some sources report the insider count is closer to 9%.
Low public float with increased demand explains the share price and trend since the February 8th announcement of AOI’s intention to expand its cannabis holdings globally.