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  5. GRGD: What are the pros/cons of buying shares in a company where the CEO owns 87% of the shares. [Groupe Dynamite Inc. Subordinate voting shares]
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Q: What are the pros/cons of buying shares in a company where the CEO owns 87% of the shares.I know you like to see insider ownership but is there a point where too much ownership by one person limits the stocks ability to appreciate. Do you like GRGD as a buy at this point?
Asked by Robert on July 28, 2025
5i Research Answer:

From a fairly weak IPO start, GRGD has staged an impressive turnaround and has gained nice momentum on the back of good numbers. We would perhaps look more at trading volume rather than actual percentage ownership. If volume is enough, then the high ownership is not overly concerning. Now, it cannot be ignored, though, as at some point an insider could sell. This could both hurt the stock price (if the sale is big) and investor sentiment (if insiders are viewed as bailing out). So it cannot be ignored, and some investors will give a stock a slight discount on this 'overhang'. We were initially cautious on GRGD, and were right for a couple of months only. Growth looks good, and valuation is 'ok' at 20X earnings. EPS last quarter beat estimates by ~16%. 

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