Impact Of Shareholding Structure On Share Price And Its Volatility 1

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Impact of Shareholding Structure on Share Price and Its Volatility
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Abstract
The study analyses the shareholding structure’s effects on share prices and volatility. The
study uses data from listed technology companies with a market capitalization of between $50M
and $300M and trading on the Nasdaq composite. A sample of 116 companies whose equity
capital structure includes some float shares was selected. The metrics used for the analysis
included ownership structures (largest shareholder, top five shareholders, 2nd to 10th
shareholders, insider shares, institutional shares, and rate of float shares). They were tested
against the volatility metrics, including mean, standard deviation, and market beta. Six
hypotheses were developed to help examine the existence of any relationship between the
shareholding structures and stock price fluctuations. The study’s findings indicate the absence of
any statistically significant direct individual relationships between the ownership structures and
volatility variables. However, valuable relationships between the largest owner, top five owners,
2nd to 10th ownership, institutional owners, insider shares, and float shares were established if the
effects of other ownership variables (including volumes of trade, average volumes of trade, and
outstanding shares) were considered. Therefore, the study concludes that share ownership
structure signi …
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