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Erasca, Inc., a biotech company valued at US$358m, has a diverse shareholder base that significantly influences its business operations and stock price. The company’s principal shareholders are institutions, holding 31% of the shares. CEO Jonathan Lim is also a major stakeholder, owning 21% of the company.
Insiders hold a substantial stake in Erasca, worth US$78m, showing alignment with shareholders. However, this also presents a risk of power concentration within the company. The general public, with a 20% stake, and private equity firms controlling 7.4%, both wield considerable influence over the firm’s operations and direction.
Public companies have strategically invested in Erasca, holding an 8.2% stake, which could offer potential advantages due to the diversity of ownership. Nevertheless, there exists a ‘crowded trades’ risk where multiple investors might rush to sell stocks during downturns. This risk is particularly pronounced for companies like Erasca that lack a growth history.
Hedge funds along with the top six stakeholders collectively own more than half of the company’s shares. This ownership structure could potentially lead to significant shifts in Erasca’s stock price due to the concentrated decision-making power these entities hold.
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