IMO it's a big positive to have a high % of the company owned by the top 20 shareholders (82.3% in Kp2), and also a big positive to have a high % of substantial holders in ownership (50.3% in kp2).
Top 2 shareholders in KP2 are Princess Aurora Company (The Bank of New York - Nominees) and SQM. Princess Aurora Company and SQM together hold about 30% of KP2. Princess Aurora Company (PAC) is owned by the Oman Investment Authority (OIA), which is responsible for managing the country of Oman's Sovereign Wealth Fund (which basically means the OIA invests Oman government money for the future benefit of the country, and they decided to buy a bunch of KP2 shares). SQM (Sociedad Quimica y Minr de Chile) is a multi billion dollar South American company (Mcap of ~$14 billion, Revenue of ~ $3 billion pa) which trades in selling fertilizer (SQM also decided to buy a bunch of KP2 shares, and coincidently KP2 is about to start building a fertilizer mine which has easy access to South America). David Hathorn, Chairman of KP2, is also a major holder through direct share ownership and through various trusts and institutions.
Some of the benefits:
Large shareholders and institutional shareholders have the resources and time to carry out significant and deep analysis on the companies they choose to invest in. Obviously institutional investors want best return on investment, so when a company has a large portion of it owned by institutional investors, it can be a sign of a good investment (although market risks are always present for all shareholders, no matter their size).
Large shareholders and institutional shareholders tend to have better access to the Board of Directors of the companies they invest in, and can therefore "keep them honest", provide oversight, and keep them on track (SQM has a representative on the KP2 Board of Directors, and OIA have a non-Board representative who is involved in oversight).
Large shareholders and institutional shareholders have access to big money, so capital raising and funding is often much easier to organise and achieve (as mentioned SQM is a multi-billion dollar company and Oman is a wealthy mid-east country).
In the case of SQM, it seems that SQM has taken an interest in KP2 because it wants to secure a future supply of potash from the mine, so this could lead to a big Offtake Agreement once the EPC contract is signed.
Needless to say that it's a very good sign when the Chairman of the KP2 owns a significant amount of shares in the company. The Chairman has access to the most up to date and in depth info on the company, and so if the Chairman is buying up big on KP2 shares, then i assume he is doing so because he has strong belief in the success of the company.
There are many more reasons that could be discussed, but the above is a start to get the conversation going. Feel free to add your opinions and thoughts.
All the above is in my opinion only. DYOR.
KP2 Price at posting:
1.1¢ Sentiment: Buy Disclosure: Held
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