While it doesn’t necessarily hold true for every company, a high level of internal ownership usually indicates that the people who know the best think the company is on the right track. After all, if the ones who have the most intimate knowledge of the company thought they were all headed for liquidation, the insiders would most likely be trying to move their shares and move them fast.
This is especially true in the tech world, where fortunes are made and sometime evaporate seemingly overnight. So we thought it would be interesting to look for companies that retained a very high level of employee ownership. Our thinking goes, if the people making the product aren’t selling, maybe the company is really onto something. Or they’re deluded. One of the two.
We decided to look for internet companies wherein employees owned over half of the company. To our surprise, we only found three on the NYSE or NASDAQ that fit this bill. Oftentimes, this is a case of companies having to shell out a sizable chunk of stock to get capital. But in others, it indicates that employees have dumped stock, taking the cash while they can.
These are the three web properties that sport an unusually high amount of intern al ownership – that is, over 50 percent of the company is owned by company employees:
LiveDeal Inc. (LIVE)
Market Cap: $48.44 million
This Groupon (GRPN) competitor has already exploded in 2014, gaining 254 percent in three weeks. The site has been spurred by successful beta launches in San Francisco and Los Angeles.
Travelzoo Inc. (TZOO)
Market Cap: $354.86 million
In an already crowded travel site marketplace, Travelzoo has carved out a niche for themselves. The company specializes in travel and local entertainment deals, and attempts to maintain a higher level of quality than their competitors in search results.
Net Element, Inc. (NETE)
Market Cap: $145.45 million
This company facilitates mobile payments, with a particular focus on emerging markets. Net Element has headquarters in Miami and Moscow.
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