With promoter stake of only 28%, what’s in it for the promoter to grow the company? Hardly any skin in the game IMHO. I would exercise lot of caution for any microcap company having such a low promoter stake (unless I know the promoter integrity, through other means)
Disclosure – not invested.
Skin in the game is better assessed by gauging what % of a promoter’s net-worth consists of equity ownership in the publicly listed company i.e. Value of equity stake in company/Total NW of promoter. Even if a promoter holds 2% of a publicly listed company, but that 2% holding represents 90% of his/her wealth, the promoter has much more skin in the game than a promoter who owns 70% of a listed entity but that stake represents only 20% of his/her net-worth (Maybe by virtue of holdings in other unlisted or listed entities).
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